Challenges in Basmati Rice Exports to Iran

26-Aug-2026 12:26 PM

New Delhi. Indian exporters—particularly companies involved in the Basmati rice trade—are increasingly concerned due to the economic sanctions imposed on Iran by the US and the suspension of trade and financial transactions with Iran by the United Arab Emirates (UAE). Iran is a key buyer of Indian Basmati rice, but significant difficulties are now anticipated regarding shipments to the country.

It is worth noting that while US economic sanctions on Iran were already in place, their scope has now been expanded through fresh restrictions. This could bring rice exports from India to a standstill. The insecurity of the Strait of Hormuz shipping route has driven up maritime transport costs and increased risks associated with crude oil supplies.

Even if Basmati rice shipments do manage to reach Iran, the issue of receiving payments remains unresolved. Previously, the UAE used to collect payments from Iran and transfer the funds to Indian exporters, but this practice has now been halted. The payment crisis is expected to persist until a new arrangement is put in place.