RiceExports – Shipping Disruptions Put India’s Basmati Trade Under Growing Pressure
RiceExports – India’s basmati rice export sector is facing significant challenges as continued disruptions along the Bab al-Mandab Strait and the Strait of Hormuz delay cargo movement through two of the world’s busiest maritime routes. The situation has slowed shipments to major markets in the Middle East and Europe, increased transportation expenses, and created financial stress for exporters waiting to move their consignments.
Export Cargo Remains Stuck at Gujarat Ports
According to industry estimates, nearly 500,000 metric tonnes of basmati and non-basmati rice are currently awaiting shipment at Container Freight Stations in Mundra and Kandla ports in Gujarat. Around 300,000 metric tonnes of this stock was originally scheduled for delivery to Iran through contracts involving both government-linked agencies and private importers. Ongoing uncertainty surrounding vessel movement in the Strait of Hormuz has prevented normal export operations, leading to mounting backlogs at ports.
Strategic Markets Face Supply Uncertainty
Saudi Arabia and Iran remain two of the most important overseas buyers of Indian basmati rice. Saudi Arabia imports around 1.2 million metric tonnes annually, while Iran purchased nearly 800,000 metric tonnes during the previous financial year. Together, these markets account for close to two million metric tonnes of India’s annual basmati exports, making uninterrupted shipping through Gulf waters essential for maintaining trade flows.
India continues to play a dominant role in global rice commerce, accounting for nearly 45 percent of worldwide rice exports and supplying more than 140 countries. Despite this position, overall rice exports, including both basmati and non-basmati varieties, declined by 7.5 percent year-on-year to approximately $11.53 billion in FY-26.
Recent Export Performance Showed Temporary Improvement
Trade data indicates that rice exports performed better during the first quarter of FY-26. Between April and June, exports increased by more than four percent compared with the same period a year earlier, reaching nearly $3.03 billion. June alone recorded exports worth more than $1 billion, reflecting a year-on-year increase of almost 16 percent as regional tensions briefly eased and shipping activity partially recovered in Gulf markets.
Industry Warns of Financial Pressure
Ranjit Singh Jossan, Vice-President of the Basmati Rice Millers and Exporters Association, said prolonged disruptions across both maritime corridors could have serious consequences for exporters, logistics providers and port operations. He noted that exporters have already invested heavily in paddy procurement, processing, packaging, transportation and handling charges before cargo reaches ports.
According to Jossan, delayed shipments have locked up substantial working capital, while businesses continue to bear interest costs on bank loans. He said the longer consignments remain stranded, the greater the financial burden on exporters with commitments to overseas buyers.
Shipping Challenges Continue to Grow
Industry representatives also pointed to increasing operational difficulties in the region. Security concerns in the Red Sea have reportedly slowed container movement through ports such as Jeddah, Jizan and Aqaba. At the same time, uncertainty in the Strait of Hormuz has continued to affect vessel scheduling and cargo transportation.
Jossan said one vessel carrying cargo for Iran reportedly returned to Jamnagar after sailing from India due to operational restrictions. He also claimed that bookings for three additional vessels intended for Iranian shipments were cancelled by shipowners because of prevailing security concerns, further adding to export delays.
Higher Freight and Insurance Costs Add to Concerns
Bal Krishan Bali, President of the association, said the ongoing crisis has pushed ocean freight charges to unusually high levels while marine insurance premiums have also risen sharply. Shipping companies are increasingly using longer alternative routes to avoid affected waters, resulting in extended transit times and significantly higher logistics costs.
He said the additional expenses are making Indian rice less competitive in overseas markets, particularly across the Middle East and Europe. Industry representatives believe that a return to normal navigation through the Strait of Hormuz and the Bab al-Mandab is essential to restore stable supply chains and reduce the financial pressure on exporters and international buyers alike.