US Sanctions on Iran Raise Concerns for Basmati Rice Exporters

25-Aug-2026 05:06 PM

New Delhi. Indian exporters are concerned about the fresh economic sanctions imposed by the US on Iran, as India's annual trade with Iran—valued at $1.60 billion—is likely to be affected, particularly raising fears of a payment crisis. Basmati rice exports are expected to bear the brunt of this impact. Due to the US economic sanctions, the payment route via the United Arab Emirates (UAE) has been blocked.

Data from the Union Ministry of Commerce indicates that India's trade with Iran stood at $1.63 billion during the 2025-26 fiscal year. By August 25, 2026, India had exported products worth $1.26 billion to Iran. Until now, India had been using the UAE as an intermediary for settlements with Iran; under this arrangement, the UAE would collect payments from Iran and subsequently transfer them to Indian exporters, ensuring smooth trade operations.

However, last week, the UAE announced the suspension of all trade and financial transactions with Iran, creating a risk that the payment mechanism could shut down entirely. Many Indian exporters are already grappling with payment-related difficulties. Alternatives are now being explored to use Türkiye, rather than the UAE, as the conduit for payments.

Exporting products to Iran has also become costlier and more expensive due to the longer time required for shipments. Exporters may have to route shipments through a third country instead of sending goods directly to Iran. Türkiye is being considered a viable option, though this would require Türkiye's consent.