India’s basmati rice exports are expected to remain stable in the current and next financial year despite geopolitical tensions in West Asia. Export volumes are projected to grow by up to 2 percent from the 6.06 million tonnes recorded in FY25. While shipments to Iran—traditionally a major buyer—may decline due to regional uncertainties, rising demand from markets such as Saudi Arabia, Iraq, the United Arab Emirates, and Yemen is expected to offset the impact. 

However, exporters could face logistical challenges, including limited shipping availability and longer transit times, which may extend working capital cycles and increase short-term borrowing requirements across the industry.

Export Outlook

India’s basmati rice industry is expected to maintain stable export volumes in the coming financial year despite geopolitical tensions affecting West Asia.

Export shipments are projected to grow modestly—by up to 2 percent—from the 6.06 million tonnes exported in FY25. This steady outlook reflects resilient demand across multiple regional markets.

Shifting Market Dynamics

Iran has historically been one of the largest importers of Indian basmati rice. However, geopolitical uncertainties and financial transaction challenges may reduce export volumes to that market.

At the same time, rising consumption in countries such as Saudi Arabia, Iraq, the United Arab Emirates, and Yemen is expected to compensate for potential declines in Iranian demand.

Logistics and Operational Challenges

Exporters are also facing operational hurdles linked to global shipping constraints. Limited vessel availability and extended transit times are likely to lengthen the working capital cycle for exporters.

Payment delays associated with cross-border trade could further increase reliance on working capital financing.

Profitability Outlook

Despite these challenges, exporters are expected to maintain operating margins by passing higher freight and insurance costs to international buyers.

Given the premium positioning of basmati rice in global markets, exporters generally retain some pricing power, enabling them to absorb external shocks more effectively than commodity-grade agricultural exporters.