The escalating crisis in Iran has hit exports from India, stranding basmati, tea and pharma exports amid President Trump’s looming threat of 25% tariff on countries doing business with Tehran, analysts have said.
Protests against Iran’s ruling clergy and civil unrest have disrupted shipments from India, especially agricultural commodities such as long-grain rice, causing a fall in local prices of basmati, reports said.
Consignments worth over ₹2,000 crore headed for Iran are stranded at at Kandla and Mundra, as traders held on to shipments because of a breakdown in port operations in Iran.
“Iran has historically been a pillar market for Indian basmati. However, the current internal turmoil has disrupted trade channels, slowed payments, and dented buyer confidence. The immediate fallout is evident in Indian mandis, where basmati prices have softened sharply,” said Prem Garg, president of Indian Rice Exporters’ Federation.
Exporters have paused shipments amid disruption in payments channels and currency volatility. India is among Iran’s top trading partners although with less than $4 billion in total annual trade.
Iran is the second-biggest buyer of Indian basmati rice after Saudi Arabia, importing around 12 lakh tonnes annually, valued at over ₹12,000 crore.
Trade with Iran could be additionally pressured by Trump’s threat to levy of 25% tariff on countries “doing business” with Iran. India is awaiting more details from the US on the levy, the commerce ministry said on Thursday.
The tariff threat has sent the price of Brent crude to above $64 a barrel, the highest since November. This could impact India, which imports most of its oil.
Higher US tariffs and the widespread unrest in Iran could impact India’s use of the strategically-located Chabahar port on Iran’s south western coast that serves as a crucial gateway for Indian goods. India operates the port under a long-term agreement signed with Iran last year.