News / Iran crisis forces India's shippers to look for alternative export markets

Iran has been a fertile market for Indian basmati rice exporters, showing steady volume growth despite the heightened geopolitical challenges to bilateral trade ties.

Over the first nine months of fiscal year 2025-26, India exported close to 600,000 tonnes of basmati grain to Iran, according to available data – mostly containerised.

“Weekly movements were as high as 5,000 teu out of India in the recent past,” one carrier source told The Loadstar.

Iran-bound cargo is mostly booked from Bandar Abbas as port of discharge. Mumbai-based Econship and Armita Shipping are among the regular capacity providers for India-Iran trade, but there are umpteen NVOs searching for lucrative freight opportunities.

As the Persian Gulf nation remains gripped by a wave of civil protests, Indian exporters are reporting serious hurdles to doing business with Iranian importers, one claiming: “Volumes have drastically dropped.”

According to industry sources, communication with their counterparts in Iran has collapsed, due to an internet blackout and other sources.

Iranian trading partners are known to owe Indian exporters some $225m for shipments last year, with no payment signals emerging, sources said.

And the additional 25% tariff threatened by US president Donald Trump on countries doing business with Iran has added to concerns for Indian exporters.

Indeed, industry leaders are exhorting exporters to search for alternative markets in Asia, Africa, and Europe to mitigate the trade impact from the crisis in Iran.

Meanwhile, beyond export implications, New Delhi has strategic investment interests in Iran – including cargo berth operations at Chabahar Port.

India, through a special-purpose entity known as Indian Ports Global, set up jointly by the government ports of Nhava Sheva and Kandla, has 10-year concession rights at Chabahar in return for a $120m investment in the port modernisation, in addition to extending a $250m credit line for other infrastructure upgrades there.

Chabahar, located beyond the Strait of Hormuz, is the only deepsea port in Iran, and has also been key to the International North-South Transport Corridor (INSTC). This alternative multimodal network for the landlocked Central Asian market is one both New Delhi and Moscow have strategically strengthened in recent years for bilateral trade ties amid the sanctions pressure on the latter.

On a broader analysis, India’s two-way trade with Iran is significantly low, just some $1.6bn last year, in comparison with the UAE, at $21bn, China, at $17bn, Turkey, at $11bn, and the EU, at $6bn, available data shows.