As regional conflict intensifies and shipping routes through the Strait of Hormuz face severe disruptions, India’s rice exporters are grappling with skyrocketing ocean freight costs.

Written by Sandip Das

As all major global shipping lines have abruptly and unrealistically hiked ocean freight rates, India’s rice exporters are facing a severe profit squeeze.

Freight Shock

A leading Basmati rice exporter said that the cost of shipping a 20-foot container to certain ports, which was earlier around $ 450, has now surged to nearly $3,700—an increase they said is ‘highly unreasonable’.

In addition, exporters said bookings and new shipments to ports connected with the Strait of Hormuz have reportedly been completely suspended.

Satish Goyal, President of the All India Rice Exporters Association, said around 0.25 million tonne (MT) of basmati rice is stuck at the Indian ports, including Mudra. Additionally, 0.25 MT of aromatic rice is in transit or has reached ports in Iran and other Gulf countries, but cannot be unloaded because of the geopolitical situation.

“The situation is particularly serious for exporters sending rice and other goods to Iran. Shipments bound for Bandar Abbas port are reportedly facing severe operational challenges, with no clear handling arrangements available,” Ranjit Singh Jossan, vice president of the Basmati Rice Millers and Exporters Association, Punjab, told FE.

Jossan said that even consignments that had already reached Iranian ports before tensions escalated are unable to move out due to delays in issuing release orders. Reports of major disruptions in internet and telecommunications services in Iran have further complicated communication with local partners and agents.

Iran has been among the largest importers of the aromatic long-grain rice from India for several years, along with Saudi Arabia, Iraq and the United Arab Emirates.

Strategic Pivot

“The government has assured us that they will look into this issue of higher freight imposed by shipping companies,” Goyal said.

Trade sources said the Government Trading Corporation of Iran –placed an order of around 0.6 MT of basmati with Indian exporters last month to bolster domestic grain stocks, anticipating a possible attack by the US.

India has been the world’s biggest rice exporter in the last decade, with a market share of around 35% to 40% in grain trade. In FY25, India’s rice exports were valued at a record $12.95 billion. During the April-January period of FY26, India shipped rice valued at $9.33 billion, a 7.5% decline year-on-year.

Prior to this conflict, payment settlements for rice exports to Iran used to take 3-4 months. The future direction of the conflict will decide future rice export prospects. In FY22, Iran’s share of India’s basmati rice exports was valued at $0.81 billion or close to 23% of total shipments valued at $ 3.54 billion.

In FY25, Iran’s share declined to 12%, amounting to $0.75 billion of the total exports of a record $5.94 billion as payments were delayed because of US sanctions.

In an earlier advisory, the Indian Rice Exporters Federation stated that as movements through the Strait of Hormuz could be restricted, members are advised against undertaking new CIF (cost, insurance and freight) commitments for these destinations. They should conclude sales on FOB (free on board) terms so that freight and insurance and related risks remain with the international buyer.

Published Date: March 6, 2026