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Iran Halts Basmati Rice & Tea Imports from India

Indian exporters believe that the ongoing protests in Iran are to blame for this shift, as hotels, shops, and other businesses are refusing to open as a result.

Shivam Dwivedi
India is the world's leading exporter of Basmati rice.
India is the world's leading exporter of Basmati rice.

Since last week, Iran has completely ceased signing new agreements to import tea and basmati rice from India. Iranian buyers have not explained the abrupt halt in business, but Indian exporters believe it is largely because of the country's closed stores, hotels, and markets due to widespread anti-hijab protests.

Trade experts speculate that Iranian importers may be holding off on purchases while New Delhi and Tehran negotiate a rupee trade settlement agreement.

The change will affect the exports of these goods, mainly tea, as Iran imports roughly 1.5 million kg of basmati rice and about 30 million kg of orthodox tea from India annually, according to exporters.

While tea exports to Iran had previously slowed down, Anish Bhansali, managing partner of Bhansali & Company, a major tea exporter to Iran, noted that buyers from there "stopped registering new contracts" as of last week.

The reason why this happened so suddenly is unclear. As per Anish, the Iranian buyers have been questioned, but they have not provided a clear response. We have notified the Tea Board and are awaiting clarification.

While basmati exporters are also dealing with this issue, the effects will be less noticeable because, since the Russia-Ukraine war, basmati exports have increased due to high global demand and rising commodity prices. 

A reduction in global supply is the cause. Commodity prices can rise as a result of geopolitical tensions involving major commodity-producing countries or regions, in part due to precautionary stockpiling.

India, the world's largest rice exporter, primarily exports non-basmati rice to African countries while also exporting premier basmati rice to the Middle East. Total rice exports increased nearly 46% year on year in 2021 to a record 21.42 million tonnes as Bangladesh, China, and Vietnam increased purchases.

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