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By Shruti Srivastava
India, the world’s biggest rice exporter, is confident sales to Iran can weather the threat of tougher US sanctions, with shipments holding up despite higher prices and months of wartime disruption.
Rice dominates trade between the two countries, accounting for nearly two-thirds of India’s $1.25 billion in exports to Iran in the fiscal year-ended March, government data show. Iran, in turn, bought about 7 per cent of India’s $11.5 billion in global rice exports.
Demand from Iran has held up despite higher prices and months of war-driven trade disruption as the country has been purchasing for “food security reasons,” according to Ajay Bhalothia, general secretary of the All India Rice Exporters Association.
Bhalothia expressed confidence the trade will continue uninterrupted even as US President Donald Trump’s administration on Monday unveiled sanctions against more than 60 entities, and threatened economic punishment against any country doing business with Iran.
The essential nature of the staple, which falls under humanitarian exception, as well as limited alternative suppliers should help sustain the trade, exporters say. Rice is a staple on the Iranian table, from chelow, the fluffy steamed rice served alongside kebabs and stews, to tahdig, the prized crispy crust formed at the bottom of the pot.
Iran purchased over 1 million tons of rice last financial year, up 17 per cent from a year ago, government data shows. The jump reflects how Indian exporters have kept shipments and payments moving through in recent period, giving both sides an incentive to preserve the trade.
Bhalothia said that Indian traders have found ways to settle payments for trade with Iran through financial channels in the UAE, Germany and China, and more recently Turkey, rather than transacting directly with Iranian banks. Those channels have continued to operate without disruption so far, he added.
Other key Indian shipments to Iran include pharmaceuticals, tea, bananas, cereals, bovine meat and some chemicals. Even these are unlikely to be disrupted, exporters say, citing humanitarian exception and limited alternatives.
Meanwhile, India hasn’t imported any crude from Iran since 2019, except for a small window that opened up this year due to US waivers. Before the US sanctions on Iran, India had longstanding ties with the nation, with Tehran among its biggest oil suppliers.
“Indian exports to Iran shouldn’t get impacted,” said S.C. Ralhan, President of Federation of Indian Export Organizations. While exports to Iran aren’t substantial, he added that “the government should immediately intervene on humanitarian grounds with some arrangement to help exporters.”
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