US Tariff Risk Hits India-Iran Basmati Exports

US proposed a 25% tariff on countries trading with Iran is intensifying risk for Indian basmati rice exporters, even as some firms have reduced direct exposure. US President Donald Trump has warned that any country doing business with Iran could face this additional duty on trade with the United States, creating a deterrent for exporters and financiers.

, a leading basmati exporter, has cut its Iran-linked business sharply from about 250,000 tonnes worth roughly $100 million in 2018 to current exposure of only $8–10 million, yet management remains concerned about payment security and pricing amid rising geopolitical uncertainty. Much of the remaining trade is channelled through the UAE, but protests and disruptions inside Iran are reportedly impairing the payment system, adding operational friction. Industry data cited from the Indian Rice Exporters Federation show Iran is still India’s second-largest market for rice, with exports of about $470 million, or 600,000 metric tonnes, between April and November this year, compared with roughly 855,000 tonnes valued at $880 million last year. More than 99% of this volume is basmati, so any sustained shock to the Iran corridor directly hits India’s premium rice segment. News of the prospective US tariff and Iran-related instability has already fed through to domestic prices, with basmati commonly shipped to Iran falling from around ₹80 per kg to about ₹75 per kg in a week. At the same time, exporters report that payments exceeding ₹2,000 crore are stuck in Iran due to disruptions in key trading hubs and weakness in the local currency, underscoring rising financial stress along the value chain. ​Disclaimer: This post is for informational purposes only and not a recommendation to buy or sell any securities. I, or my family, associates, or relatives, may have a financial interest in the securities mentioned.