Impact of Iran-Israel Conflict on Indian Exports
Introduction
The ongoing Iran-Israel conflict has led to a halt in shipments of key Indian exports such as basmati rice and tea, causing a significant impact on exporters.
Basmati Rice Exports
- Iran is the largest consumer of Indian basmati rice, importing 1.2 million tonnes annually out of the total six million tonnes exported.
- Current shipments and payments are on hold due to the conflict, causing a drop in international prices by $100 per tonne.
- Exporters are in discussions with officials, seeking a quick resolution to the situation.
Tea Exports
- India annually exports 20,000-25,000 tonnes of tea to Iran, primarily orthodox tea.
- Exports are on hold during the prime tea season in Assam, with potential delays in shipments waiting at ports.
- Current market conditions show a drop in auction prices and uncertain future shipments.
Wider Economic Implications
- Exporters are concerned about the potential impact on other markets such as Azerbaijan and Kazakhstan.
- The Ministry of Commerce and Industry plans to meet with stakeholders to address the challenges posed by the conflict.
- Increased costs are expected in air and sea freight, fuel, and risk insurance premiums.
- Closure of the Strait of Hormuz could extend shipping times by 15-20 days and increase costs by 40-50%.
