Around 400,000 tonnes of basmati rice stuck at ports or mid-transit due to shipping disruptions
Freight rates on Asia–Middle East routes surge to $3,500–$4,500 per container
Middle East accounts for 60–70% of India’s basmati exports; Iran alone buys up to 20%
Exporters warn rising fuel, insurance and logistics costs are squeezing contracts and cash flows
Industry body urges government to waive port charges and recognise the crisis as force majeure
India’s basmati rice exports are facing disruption amid the ongoing conflict involving the United States and Israel on one side and Iran on the other, as instability along key maritime routes pushes up freight, fuel and insurance costs while affecting container availability and vessel schedules.
Industry estimates suggest around 400,000 metric tonnes of basmati rice is currently stuck at ports or mid-transit, with exporters struggling to ship consignments because of shipping disruptions and rising freight costs.
Exporters are now seeking urgent government intervention to help ease the pressure on contracts and cash flows.
The Indian Rice Exporters’ Federation (IREF) has urged the government to introduce immediate relief measures for exporters facing severe disruption in shipping and logistics following the crisis, warning that rising freight, fuel and insurance costs are putting pressure on export contracts and cash flows.
There is an acute shortage of containers, while some shipping lines have suspended or cancelled vessel calls to parts of the West Asia, one of the largest markets for Indian basmati rice, exporters have reported. International freight costs have risen sharply, with overall charges increasing by around 15-20 per cent, according to the federation.
Container freight rates on the Asia-West Asia route have surged from roughly $1,200-$1,800 per FEU (forty-foot equivalent unit, standard measure for container) to between $3,500 and $4,500, almost three times.
West Asia remains a crucial destination for India’s basmati rice exports.
In the financial year 2024–25, India exported about 6 million tonnes of basmati rice, with 60-70 per cent of shipments going to Gulf countries. Iran is also a major buyer, accounting for around 15-20 per cent of India’s basmati exports. In the previous financial year alone, India exported about $1.2 billion worth of basmati rice to Iran.
The conflict has also led to steep increases in war-risk surcharges and insurance premiums for ships transiting the Gulf. Bunker fuel prices have risen from about $520 to $700, while domestic basmati prices have softened by 7-10 per cent in the past 72 hours, reflecting market uncertainty.
Exporters say the crisis is also affecting transit times. Shipments that earlier took 25-30 days via the Suez Canal route are now taking 35-45 days in some cases as vessels reroute around the Cape of Good Hope to avoid security risks.
This detour is contributing to longer delivery times, port congestion and higher logistics costs.
“Our exporters cannot absorb abrupt freight, fuel and insurance shocks while shipments are delayed or rolled,” said Dev Garg, vice president, IREF. “Time-bound relief and clear advisories are essential to protect contracts, cash flows and India’s export commitments.”
In a representation submitted to the Agricultural and Processed Food Products Export Development Authority (APEDA), the federation has requested a series of immediate relief measures.
These include a waiver of port-related charges such as storage and demurrage for cargo affected by vessel cancellations, facilitation to redirect or divert cargo already in transit, and an official government advisory recognising the situation as a “force majeure” event.
Such a declaration could help exporters avoid contractual penalties while the conflict continues to disrupt shipping routes across the region.