US tariff threat weighs on India's basmati rice exports to Iran, KRBL says exposure is lower now

Akshay Gupta, Business Head – Bulk Exports at Indian basmati rice exporter KRBL, said the company’s direct exposure to Iran is much lower than it used to be, but fresh uncertainty around payments and pricing is still worrying the industry after a new tariff threat from the US.

US President Donald Trump recently said that any country doing business with Iran could face a 25% tariff on trade with the United States. While companies like KRBL have already scaled back their Iran-linked business due to past sanctions, exporters say the latest development adds another layer of risk.

“At one point, we used to do about 250,000 tonne,” he said, referring to 2018, when trade with Iran was largely open. That business was worth around $100 million at the time.

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Today, KRBL’s exposure to Iran is about $8 million to $10 million.

Most of this trade is routed through the United Arab Emirates, where Iranian importers operate trading companies. But Gupta said protests and internal disruptions in Iran have begun to affect the payment system.

Dev Garg, Vice President at the Indian Rice Exporters Federation (IREF), said Iran has consistently been one of the biggest buyers of Indian basmati rice.

“For the last many years, Iran has been the second largest market for Indian rice,” he said.

Also Read | Indian rice exports to the US remain stable despite tariff concerns, says industry body

According to IREF data, between April and November this year, India exported rice worth about $470 million to Iran, equal to around 600,000 metric tonne. Last year, exports stood at about 855,000 metric tonne, valued at around $880 million.

Garg said more than 99% of rice exported to Iran is basmati.

Garg said news of the possible US tariff and uncertainty around Iran has already affected prices in India.

Last week, basmati rice, commonly exported to Ira,n was selling at about ₹80 per kg. After the announcement, prices dropped to around ₹75 per kg.

He also said payments worth more than ₹2,000 crore are reportedly stuck in Iran due to disruptions in central trading areas and weakness in the local currency.

For the full interview, watch the accompanying video

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