Trump's Tariff Threatens India's Rice Exports to Iran

President Trump's 25% tariff on nations trading with Iran poses risks to India's rice exports, as Iran is a key market for Indian Basmati rice. The tariffs could complicate trade, impact payment systems, and reduce buyer confidence, affecting not only exporters but also farmers and the domestic market.

President Donald Trump's announcement of a 25% tariff on any nation continuing business with Iran is expected to exacerbate uncertainties within global trade. This decision poses a significant threat to India's agricultural export sector, particularly affecting rice exports. Iran is a crucial market for Indian Basmati rice, with substantial export volumes directed there.

The proposed tariff aims to penalize third countries engaged in trading activities with Iran, complicating payment mechanisms and raising transaction risks. This move is likely to dampen buyer confidence at a time when the market is already on shaky ground. For the period of April-November 2025-26, India's Basmati rice exports to Iran were valued at USD 468.10 million, with shipments reaching 5.99 lakh metric tonnes.

The Indian Rice Exporters Federation (IREF) cautions that further geopolitical and economic pressures could slow down order flows and delay shipments, creating adverse impacts on both exporters and farmers. Prem Garg, National President of IREF, noted that internal instability and financial disruptions in Iran are already reflecting in Indian markets, causing Basmati prices to fall significantly. The newly announced tariff could further discourage international banking channels and insurers from facilitating transactions with Iran, even for essential commodities like food.

Garg emphasizes a need for caution and a calibrated approach to protect exporters and farmers amid geopolitical and internal instabilities. He stresses that while India's rice sector is resilient, safeguarding it requires timely intelligence and responsible trade practices. IREF advises exporters to use secured payment methods and explore alternative markets in West Asia, Africa, and Europe to offset potential disruptions. Moving forward, India's rice export ecosystem faces a challenging path in navigating sanctions-induced volatility while ensuring farmer livelihoods and export consistency.

(With inputs from agencies.)