Business News

India's rice exports remain resilient amid West Asia conflict, aided by alternative routes, govt support

New Delhi [India], April 9 (ANI): India's Basmati rice export sector has remained resilient despite tensions in the West Asia region, with exporters saying the impact of the conflict has been far less severe than initially feared due to alternative supply routes and timely policy support from the government. According to Dev Garg, Vice President of the Indian Rice Exporters Federation (IREF), the sector faced initial disruptions after the conflict began, but has since stabilised and is currently performing strongly. "Despite the war, despite the Iranian war, the Basmati rice export ecosystem has flourished," Garg told ANI. He said concerns were initially high because the Middle East accounts for the bulk of India's Basmati rice exports. "Since 28th of February, when this war started, there was an expectation that the rice sector will be badly hit... because 70 per cent of all our exports are to the Middle East," he said. Garg noted that the top five destinations for Indian Basmati rice -- Saudi Arabia, Iran, Iraq, the UAE and Yemen -- together account for a significant share of India's exports. "All these five countries constitute 50 per cent of all of India's Basmati rice exports. And all these five countries were involved in this conflict," he said. Following the outbreak of the crisis, market sentiment turned negative and wholesale prices dropped. "As soon as we heard news of this crisis unfolding, the wholesale market prices for Basmati fell by about 7-8 per cent," Garg said. Exporters also faced severe logistical disruptions in the early weeks of the conflict. "Many exporters had their cargo stuck at the load port. Many were stuck in transit. And many were stuck at the destination ports," he said. Shipping costs surged sharply due to war-related levies and insurance concerns. "If we take the case of Saudi Arabia, a 600-dollar per container cost was increased to 2,600 dollars overnight. A war surcharge of 2,000 dollars per container was imposed, leading to an increase of more than 400 per cent on logistics costs," Garg said. He added that several shipping lines cancelled containers, forcing exporters to reroute shipments and incur additional storage and detention charges. "Many exporters were forced to discharge their cargoes at other ports than they had originally planned for. This led to enormous storage, detention and other charges which no exporter can bear," he said. Despite these challenges, exporters quickly adapted by identifying alternative routes to maintain supply to key markets. "Food will always find its way. So food has found its way through different alternative routes," Garg said. He pointed out that Turkey's Mersin port has emerged as a key alternative route for shipments destined for Iraq and Iran. "The Mersin port in Turkey is being used as an alternative port to reroute consignments to Iraq and furthermore to Iran. This has eased a lot of burden for the rice export ecosystem," he said. It was also seen that as the situation evolved, demand for rice in the region increased as consumers and traders sought to secure essential food supplies. "All buyers want to buy because in such an environment there is a tendency for local populace to hoard essential items. So this led to a huge increase in demand for rice which is a staple commodity in all the Middle Eastern countries," he said. And all this led to increase in price levels for the exporters. "Today if we look at the wholesale prices of Basmati rice, they are actually much more than the pre-war levels," he said. He added that the current situation has effectively turned the market in favour of exporters. "Today it has become the seller's market. So today it is the seller who holds all cards in his hands," Garg said. The exporter also credited government intervention for supporting the sector during the crisis. "We congratulate the government for introducing a very good scheme wherein they have ensured that in spite of having no insurance premium, an exporter will be covered up to 50 lakh rupees for any losses they might incur," he said. He noted that the government also expanded coverage under existing export credit insurance policies. "The government came out with a scheme that in the existing policy 100 per cent coverage will be made. This is an unprecedented move because this happened for the first time anywhere in the world that an existing insurance policy has been topped up," Garg said. According to him, these measures helped India maintain its competitiveness against other rice exporting nations. "This also enabled India to be in a much more favourable position vis-a-vis competitors such as Pakistan and Thailand. That is why we have maintained our market share in spite of all the odds," he said. Garg also emphasised the strategic importance of India's rice exports for global food security. "The rice sector is a national strategic asset because being a staple item, many countries are dependent on Indian rice for their domestic food security," he said. "If today India stops supplying rice to them, there will be a humanitarian crisis in all these countries," he added. India remains a key player in the global rice market. According to government data, the country produced 150.18 million tonnes of rice in the agricultural year 2024-25, making it the world's second-largest producer. Rice exports reached USD 12.95 billion in 2024-25, reflecting strong global demand for Indian rice. Data from the Indian Rice Exporters Federation shows that during April-December 2025, exports to the Middle East totalled 3.90 million metric tonnes. Highlighting the resilience of the sector, Garg said India's rice trade has historically continued even during severe conflicts. "As you would recall, Yemen is our fifth largest market for Basmati rice. There has been a civil war going on in Yemen for a very long time. In spite of such a turbulent situation which is much more severe than the current Iran crisis, Yemen is our fifth largest market," he said. "This again sheds the spotlight on what the rice sector means for India as a whole... it gives us diplomatic leverage and it gives us the resilience to negotiate at the bigger table," Garg added. (ANI)

Latest Stories

Read Full Story