As geo-political tensions escalate between Iran and Israel, Indian tea and basmati rice exporters have taken a cautious stance, opting to suspend exports to Iran, Israel, and other Middle Eastern nations. The decision comes in the wake of heightened tensions following Israeli strikes near Iranian nuclear facilities in Isfahan, triggering concerns about further unrest in the region.
Anish Bhansali, managing partner of Bhansali & Co., a prominent exporter to Iran, affirmed the halt in shipments, citing the uncertain geopolitical climate. “We have stopped shipping teas to Iran. The geopolitical situation does not look to die down soon. The shipping companies will be staying away from the region till the situation improves,” stated Bhansali.
Also, Mohit Agarwal, director of Asian Tea Company, expressed disappointment over the disruption in tea exports to the Gulf nation, highlighting the anticipated export volume of orthodox tea for the year. “This year, we were expecting exports of 40–45 million kg of orthodox tea to the Gulf nation. The initial buying of the new season teas by Iran had raised hope for us,” lamented Agarwal.
Gautam Miglani, managing partner of LRNK, a Haryana-based basmati rice exporting firm, echoed sentiments of caution, revealing the decision to put exports on hold amidst the current geopolitical tension. Miglani emphasized the logistical challenges faced by exporters, including reduced ship traffic from Iranian ports and increased waiting times at Indian ports.
Likewise, Miglani noted the reluctance of insurance companies to extend coverage for exports to Iran, exacerbating the uncertainties surrounding rice exports. As a result, the industry has adopted a wait-and-watch approach, refraining from further commitments until the situation stabilizes.
The suspension of exports to West Asia underscores the far-reaching implications of geo-political tensions on India’s agri-commodity trade, with basmati rice exports to Iran alone accounting for a significant portion of India’s total exports in FY24. As exporters navigate the volatile landscape, they remain vigilant, awaiting signs of diplomatic de-escalation to resume trade activities.