Indian basmati rice exporters are at risk of losing their crucial Iran market as Washington amplifies secondary sanctions that threaten trade routes and payments, potentially disrupting a key industry and exposing Indian firms to greater enforcement risks.
India’s basmati exporters are bracing for a fresh hit from Washington’s stepped-up campaign against Iran, as the Trump administration prepares a broader sweep of secondary sanctions that could make payments and shipping into the country even harder. According to Business Standard, the warning from US Treasury Secretary Scott Bessent has revived concern that one of India’s most important rice markets could be caught in the crossfire of a larger economic assault on Tehran.
India ships about 5 million to 6 million tonnes of basmati rice a year, with nearly 1 million tonnes normally going to Iran. Business Standard reported that Iran accounted for almost 60 per cent of India’s $1.3 billion of exports to the country in FY26, underscoring how dependent some traders are on the market. But shipments have already fallen sharply: between April and June 2026, India exported about 120,847 tonnes of basmati rice to Iran, down nearly 62 per cent from a year earlier, traders told the paper.
Exporters say the strain has been building since April, when disruption around the Strait of Hormuz and wider transport problems began to interfere with deliveries. One Haryana-based exporter told Business Standard that a further tightening of supplies would worsen an already damaged market. Satish Goel, president of the All India Rice Exporters Association, said the crucial risk would be if banks and processors in the UAE stopped handling payments for rice sold to Iran. Most buyers are based in the UAE, he said, and if sanctions cut off payment routes through that channel, exporters would face serious trouble.
The broader backdrop is a sharp contraction in India-Iran trade, which has dropped from $17 billion in FY19 to $1.6 billion in FY26 after New Delhi stopped buying Iranian crude. At the same time, the US is widening its sanctions net well beyond Iran itself. Reuters reported this week that the State Department sanctioned four India-based companies over Iranian petroleum and petrochemical trade, highlighting the compliance risks for Indian firms even when their direct exposure is limited. Analysts say the bigger issue may be how aggressively Washington enforces the new measures, especially because Indian companies remain exposed to Russian imports and to a prolonged Gulf conflict.
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