From fertilisers to rice, pulses, tea and apples: Middle East conflict threatens India-Iran agri trade
Overall, 13-15% of seaborne grains and oilseeds and about 20% of fertiliser trade pass through the Suez Canal. The Strait of Hormuz also plays a crucial role in the movement of crop nutrients. Extended disruptions in the region, commodity experts say, could choke grain and feed flows, restrict Gulf fertiliser supplies, and raise costs. Notably, with uncertainty over demand from Iran, Brazil’s corn exports face hardships; wheat prices remain volatile, while soybean oil has climbed to multi-year highs with additional pressure from firm crude 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 escalate if the war extends beyond a week. For now, he adds, shipments are delayed due to the Strait of Hormuz closure.
In 2025, India exported goods worth $1.2 billion to Iran, mainly rice ($747 million) and tea ($51 million), and imported $408.6 million in goods, including apples ($71.5 million).
“Iran imports turmeric, cumin, sugar, groundnut, kabuli chickpeas from India in good quantity. The exports of these commodities are getting affected,” says Rahul Chauhan, Director, IGrain India.
Rice trade
India’s rice exports, however, face a unique risk, as the grain accounts for over half of India’s shipments to Iran, say stakeholders. The Indian Rice Exporters Federation (IREF) advises members to avoid new cost, insurance, and freight (CIF) contracts with Iran and Gulf buyers, favouring free on board (FOB) terms that place freight, insurance, and risk on buyers, warning that the conflict could disrupt shipments and push costs higher.
India exports roughly 6 million tonnes (MT) of basmati rice annually, with the Middle East, including Saudi Arabia, Iraq, the UAE, and Yemen, driving most of the demand. Iran has historically been a major buyer but the ongoing conflict has sharply slowed or halted shipments to the country and the region.About 200,000-250,000 tonnes of aromatic rice are stranded at Indian ports due to heightened shipping risks, according to a Bloomberg report, citing Satish Goel, president of the All India Rice Exporters Association (AIREA). Goel says that securing vessels has become increasingly difficult. The government should waive port ground rent and offset interest costs from the delay.
According to the AIREA, India exported 6.065 MT of basmati rice in FY25, worth Rs 50,312 crore ($5.94 billion), while total rice production was 150.1 MT, with basmati accounting for 7-7.5 MT. Non-basmati exports stood at 14-15.1 MT, with Iran accounting for just over 6% of total rice exports.
“The ongoing conflict in West Asia has disrupted India’s rice exports, leaving about 2-4 lakh tonnes of rice stuck at different stages of the supply chain. Nearly 3,000 rice containers are currently stranded at Indian ports, including Kandla and Mundra. Exporters have urged the government to waive port charges as demurrage costs rise. A meeting with the Commerce Ministry is expected to discuss possible measures to address their concerns,” says Rahul Chauhan.
Impact on pulses
For now, the impact of the war in the Middle East is limited, apart from the rupee weakening, which will raise the cost of imported goods, but traders warn that pulse prices may also spike if the war lasts beyond a week. India imports 5-6 MT of tur, urad, and lentils from Myanmar, Canada, and Africa, and rising logistics costs could boost retail prices, fuelling food inflation. India imports around 5-6 MT of pulses annually, including tur, urad, and lentils, from Myanmar, Canada, and parts of Africa. Any increase in logistics costs could raise landing prices, which would likely push up retail rates and add pressure to food inflation.
“Some cargo does pass through the Red Sea, so any disruption there could create constraints in imports. War risk premiums have also increased, pushing up insurance costs for container shipments. However, much of India’s pulse imports are unlikely to be directly affected. Red lentils and yellow peas from Canada typically come via the Pacific, while chickpeas and lentils from Australia follow routes away from the conflict zone. Tur imports from Myanmar are also unlikely to face disruption. Overall, there may not be a major direct impact on supplies, as cargo will continue to move. But indirect effects are likely,” says Bimal Kothari, Chairman, India Pulses and Grains Association (IPGA).
“Higher war risk premiums, rising oil prices that increase freight costs, and the rupee’s depreciation could all push up import costs. Some cargo moving 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.
Varun Gupta, Treasurer, Delhi Dal Millers Association, says pulses production looks strong this year. Apart from India, several producing countries are also expecting good output and many shipments to India have already been made and more are lined up, adds Gupta, noting that Rabi sowing has also increased this season, improving overall production prospects and leaving supplies comfortably placed for now. “The only concern, if the war drags on, is supply from Africa and Brazil, from where we import tur and urad under contract farming arrangements. There are also global container availability issues that could disrupt shipments. However, most of these exports are scheduled about two months later, so the impact will depend on how the situation evolves over that period. For now, we do not see any direct impact. But the stronger dollar against the rupee is already pushing up import costs, which could make pulses costlier,” adds Gupta.
Tea exports
Tea shipments could also face pressure. Iran, till some years ago, accounted for roughly 15-20% of India’s tea exports, but Tea Board data for 2024 shows shipments dropping to below 5%. India exported about Rs 7 billion worth of tea to Iran in 2024-25, and any escalation that disrupts shipping routes, insurance, or payment channels could delay consignments and strain exporters already grappling with global volatility, stakeholders say.
Apple trade
Harish Chauhan, Convener, Himachal Pradesh’s Sanyukt Kissan Manch, says while it is too early to gauge how the Iran war will impact apple trade, particularly since India imports large volumes of low-priced apples from Iran, the situation warrants close monitoring.
“The exposure is most evident on the import side, where India’s reliance on Iran is limited but highly concentrated. In 2024, Iran accounted for nearly 60% of India’s pistachio imports, about 39% of almonds, and close to 23% of apples, according to trade data. Traders are already factoring this uncertainty into future trading strategies. Given the price advantage of Iranian apples, any prolonged disruption leading to reduced imports could force a recalibration of sourcing strategies and reshape dynamics in India’s apple market,” adds Chauhan.
Fertiliser supply
The Iran conflict threatens a key fertiliser hub, risking higher crop costs and food inflation. The Gulf hosts major plants, and the Strait of Hormuz carries about a third of global nutrient trade, just as Northern Hemisphere farmers begin fertiliser use.
“India produces over 26-28 million tonnes of urea annually, with a significant portion of plants relying on imported LNG as feedstock. Any stoppage or delay in LNG supplies could temporarily affect operational planning for fertiliser manufacturers. However, the industry is likely to mitigate risks through diversified LNG procurement and government-backed supply mechanisms,” says Abhishek Wadekar, Founder Chairman, Tradelink International.
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