From fertilisers to rice, pulses, tea and apples: Middle East conflict threatens India-Iran agri trade
Overall, 13-15% of seaborne grain and oilseeds and approximately 20% of the fertilizer trade passes through the Suez Canal. The Strait of Hormuz also plays an important role in the transportation of nutrients. Commodity experts say prolonged disruptions in the region could disrupt the flow of grain and feed, restrict Gulf fertilizer supplies and increase costs. Brazil’s corn exports face challenges due to uncertainty regarding demand, especially from Iran; While wheat prices continued their fluctuating course, soybean oil climbed to its highest levels in recent years with the additional pressure created by strong crude oil prices, biofuel demand and US-China trade tensions.
Ajay Srivastava, founder of Delhi-based think tank Global Trade Research Initiative (GTRI), says the impact could increase if the war continues for more than a week. He added that for now, shipments have been delayed due to the closure of the Strait of Hormuz.
In 2025, India exported goods worth $1.2 billion to Iran, mainly rice ($747 million) and tea ($51 million), and imported goods worth $408.6 million, including apples ($71.5 million).
“Iran imports a good quantity of turmeric, cumin, sugar, peanuts and Kabuli chickpeas from India. Exports of these goods are affected,” says Rahul Chauhan, Director, IGrain India.
rice trade
But stakeholders say India’s rice exports face a unique risk because the grain accounts for more than half of India’s shipments to Iran. The Indian Rice Exporters Federation (IREF) has advised its members to avoid new cost, insurance and freight (CIF) contracts with Iran and Gulf buyers and opt for free on board (FOB) terms that shift freight, insurance and risk to buyers, warning that the dispute could disrupt shipments and increase costs.
India exports around 6 million tonnes (MT) of basmati rice annually, with the Middle East, including Saudi Arabia, Iraq, UAE and Yemen, accounting for most of the demand. Iran has historically been a major buyer, but ongoing conflicts have sharply slowed or halted shipments to the country and the region. According to a Bloomberg report citing All India Rice Exporters Association (AIREA) president Satish Goel, around 200,000-250,000 tonnes of aromatic rice is stranded in Indian ports due to increased shipping risks. Goel says securing ships is becoming increasingly difficult. The government should waive port land rent and offset interest costs resulting from the delay.
According to AIREA, India exported 6,065 MT of basmati rice worth Rs 50,312 crore ($5.94 billion) in FY25, while total rice production was 150.1 MT, of which 7-7.5 MT was basmati. Non-basmati exports stand at 14-15.1 tons, accounting for slightly more than 6% of Iran’s total rice exports.
“The ongoing conflict in West Asia has disrupted India’s rice exports, resulting in around 2-4 lakh tonnes of rice getting stuck at different stages of the supply chain. Around 3,000 rice containers are currently stranded in Indian ports, including Kandla and Mundra. Exporters have appealed to the government to waive port charges as demurrage costs rise. A meeting with the Ministry of Commerce is expected to discuss possible measures to address their concerns,” Rahul Chauhan said.
Effect on strokes
The impact of the war on the Middle East is limited for now, apart from the weakening of the rupee, which will increase the cost of imported goods, but traders warn that prices of pulses could also rise if the war continues for more than a week. India imports 5-6 tonnes of tur, urad and lentils from Myanmar, Canada and Africa, and rising logistics costs may increase food inflation by increasing retail prices. India imports around 5-6 tonnes of pulses annually, including tur, urad and lentils, from Myanmar, Canada and parts of Africa. Any increase in logistics costs could push up selling prices, which would likely push up retail rates and put pressure on food inflation.
“Some of the cargo passes through the Red Sea, so any disruption there could result in restrictions on imports. War risk premiums have also increased, increasing insurance costs for container shipments. However, most of India’s pulse imports are unlikely to be directly affected. Red lentils and yellow peas from Canada usually arrive via the Pacific, while chickpeas and lentils from Australia follow routes away from the conflict zone. Tour imports from Myanmar are also unlikely to face disruption. General As such, there may not be a major direct impact on the country as supplies will continue to move, but indirect impacts are also likely,” says Bimal Kothari, President, Indian Pulses and Grains Association (IPGA).
“Higher war risk premiums, rising oil prices that increase freight costs and depreciation of the rupee may increase import costs. Some cargoes passing through the Red Sea, such as shipments from Russia or parts of Latin America, may face delays, but the overall impact is expected to be limited,” adds Kothari.
Delhi Dal Millers Association Treasurer Varun Gupta says that pulses production looks strong this year. Gupta adds that many producing countries, as well as India, are expecting good production and that many shipments have already been made to India and more are lined up. He also stated that Rabi planting has also increased this season, overall production expectations have improved and supplies are comfortably settled for now. “If the war continues, our only concern will be supplies from Africa and Brazil, where we import tur and urad under contract farming arrangements. There are also global container availability issues that could disrupt shipments. But most of these exports are scheduled for around two months, so the impact will depend on how the situation evolves in that period. We are not seeing a direct impact for now. But the strengthening dollar against the rupee is already increasing import costs, which could make pulses more expensive,” he adds.
tea export
Tea shipments may also face pressure. Until a few years ago, Iran accounted for roughly 15-20% of India’s tea exports, but the Tea Board’s 2024 data shows shipments falling below 5%. India exports around Rs 7 billion worth of tea to Iran in 2024-25 and any increase that disrupts shipping routes, insurance or payment channels could delay shipments and strain exporters already grappling with global volatility, stakeholders say.
apple trade
Sanyukt Kissan Manch Convener from Himachal Pradesh, Harish Chauhan, says it is too early to gauge how the Iran war will affect the apple trade and the situation needs to be closely monitored, especially as India imports large quantities of low-priced apples from Iran.
“This risk is most evident on the import side, where India’s dependence on Iran is limited but quite intense. In 2024, Iran accounted for about 60% of India’s imports of peanuts, about 39% of almonds and about 23% of apples, according to trade data. Traders are already factoring this uncertainty into their future trade strategies. Given the price advantage of Iranian apples, any prolonged disruption that would lead to reduced imports could force a readjustment of imports. source finding strategies and reshaping the dynamics in the Indian apple market,” adds Chauhan.
fertilizer supply
Conflict in Iran threatens a major fertilizer hub, risking higher crop costs and food inflation. The Gulf is home to large crops, and the Strait of Hormuz carries about a third of global food trade at a time when Northern Hemisphere farmers are turning to fertilizer.
“India produces over 26-28 million tonnes of urea annually and a significant portion of the plants rely on imported LNG as feedstock. Any disruption or delay in LNG supply may temporarily impact operational planning of fertilizer producers. However, the industry is likely to mitigate risks through diversified LNG supply and government-backed procurement mechanisms,” says Abhishek Wadekar, Founder, Tradelink International.
