“After the interim (US-Iran) peace deal was announced, exporters started buying basmati rice in good quantities for shipment to the Middle East and prices surged 15-20%. But this sudden announcement will bring down prices,” said Dev Garg, vice-president, Indian Rice Exporters Federation.
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Nearly 60,000 tonnes of basmati rice destined for West Asian markets is currently in transit.
Five of the leading destinations for Indian basmati rice are in West Asia – Saudi Arabia, Iran, Iraq, the UAE and Yemen. Together, they account for about 50% of India’s total basmati rice exports and are among the markets most directly affected by the disruption. India produces about 7.2 million tonnes of basmati rice annually, of which around 6 million tonnes is exported.
West Asia is also a major export destination for Indian tea. Consumers in the region have a strong preference for Indian second-flush premium orthodox teas. Orders usually begin flowing in from late May, with shipments starting in early June. Second-flush teas are a significant foreign-exchange earner for the country.
“India’s tea exports, which hit an all-time record of 285 million kg in 2025, have faced a huge challenge due to the Middle East crisis. Close to 50% of the tea shipped from India goes to Middle Eastern countries. The blockade of Hormuz and the sharp increase in freight charges through Red Sea ports have brought our exports to a virtual standstill,” said Mohit Agarwal, director of Asian Tea & Exports, a major exporter to the region.