Chandigarh, March 3: India’s dominant position in the global basmati market is under threat as military volatility in the Middle East brings exports to a standstill. With the United States and Israel launching strikes on Iran, and Houthi groups targeting Red Sea shipping, the logistical pathways for 60 lakh tonnes of annual exports have been compromised.
Industry leaders noted that this disruption is particularly damaging for Punjab and Haryana, which account for 40% and 35% of national basmati production, respectively. The current instability follows a previous trade freeze in January caused by currency fluctuations and sanctions, which had already left ₹2,000 crore worth of stock stranded.
The threat to the Strait of Hormuz and the Red Sea has caused freight rates to surge. “Iran is our biggest buyer of basmati, while it is also exported to other countries, including the UAE, Oman, Yemen and Iraq. The shipments for March will be affected,” declared Karnal-based miller Neeraj Kumar. He asserted that the long-term health of the trade depends entirely on the duration of the military hostilities.
Ranjit Singh Jossan of the Punjab basmati exporters association affirmed that shipping companies have ceased operations in the affected zones. He stated that the declaration of Iran’s Bandar Abbas port as non-functional for commerce has severed links to markets in Russia and Afghanistan.
The IREF has advised a cautious approach to new contracts as insurance costs skyrocket. The federation maintained that because five of the top basmati destinations are located within the conflict zone, nearly half of India’s total export volume is at immediate risk.
“If the war stretches, halting the trade, the losses for the exporters will mount and will also cause a fall in basmati prices, impacting the growers of the aromatic grain,” Jossan asserted.
