New Delhi, Jan 13 (PTI) Civil unrest in Iran has started impacting India's basmati rice exports to the country, leading to a sharp fall in domestic prices, as exporters face payment delays and mounting uncertainties, an industry body said on Tuesday.

The Indian Rice Exporters Federation (IREF) urged exporters to reassess risks on Iranian contracts and adopt secured payment mechanisms, warning against over-leveraging inventories meant for the Iranian market.

India exported USD 468.10 worth of basmati rice to Iran during April-November of 2025-26 fiscal, totalling 5.99 lakh tonnes, trade data showed.

Iran is India's top basmati rice export destination, but the current financial year has seen growing stress on order flows, payment cycles, and shipment schedules due to the prevailing instability.

The impact is now clearly visible in domestic mandis. Over the past week alone, prices of key basmati varieties have registered a steep decline, reflecting buyer hesitation, delayed contracts and heightened risk perception among exporters.

The domestic price of basmati rice variety 1121 has come down to Rs 80 per kg from Rs 85 per kg last week, while varieties 1509 and 1718 declined to Rs 65 per kg from Rs 70 per kg.

"Iran has historically been a pillar market for Indian basmati. However, the current internal turmoil has disrupted trade channels, slowed payments and dented buyer confidence," IREF National President Prem Garg said in a statement.

He said exporters must exercise heightened caution, particularly with respect to credit exposure and shipment timelines.

Importers have conveyed their inability to honour existing commitments and remit payments to India, creating uncertainty for exporters, the federation said.

IREF has issued an advisory and appealed to stakeholders to diversify into alternative markets across West Asia, Africa and Europe to cushion any prolonged slowdown in Iran-bound shipments.

"We are not sounding an alarm, but urging prudence. In periods of geopolitical and internal instability, trade is often the first casualty. A calibrated approach is essential to protect both exporters and farmers," Garg noted.

US Tariff Concerns The federation also addressed concerns over the recent remarks by US President Donald Trump, indicating that countries continuing trade with Iran may face a 25 per cent tariff.

IREF clarified that Indian rice exports to the US are already subject to a 50 per cent tariff, up from 10 per cent earlier.

Despite this, Indian rice exports to the US have remained resilient. India exported 2,40,518 tonnes of Basmati and non-Basmati rice to the US during April-November 2025-26, compared to 2,35,554 tonnes in the entire 2024-25 fiscal.

The US is the 10th largest market for Indian rice globally and the fourth largest for Basmat rice.

"There is limited clarity on whether the proposed 25 per cent tariff would be levied over and above the existing 50 per cent duty," the federation noted, adding that it does not foresee a significant decline in exports even if tariffs rise further, given the unique position of Indian Basmati in global markets.

However, IREF expressed greater concern over developments in Iran, where disruptions in local markets have affected trade settlements. Importers have conveyed their inability to honour commitments and remit payments to India, creating heightened uncertainty.

While similar crises have occurred in the past, the trajectory of the current situation remains unclear and is expected to cause further disturbances in prices, liquidity, and trade sentiment in the weeks ahead, the federation added. PTI LUX HVA