New Trump tariff could be last straw for basmati exports to Iran, Pg19

Key Highlights:

• Donald Trump's proposed 25% tariff on countries trading with Iran threatens India's basmati rice exports.
• Iran is India's third-largest basmati rice market, importing $753.20 million worth in 2024-25.
• Basmati rice exports to Iran increased by 20.9% from April-November 2024 to April-November 2025.
• Iran ended subsidized foreign currency for essential imports on January 1, impacting trade viability.

Detailed Insights:

• India's basmati exports to Iran are also routed through Dubai due to reliable banking channels.
• Exporters prefer selling to Iranian government tenders or shipping via Dubai for payment security.
• Trump's tariff announcement has created uncertainty, causing exporters to hesitate on new contracts.
• Prices of Pusa Basmati-1718 and Pusa Basmati-1509 rice have declined due to recent disturbances in Iran.
• Basmati exports to Iran peaked in 2018-19 but decreased after the reinstatement of US sanctions.
• Ending subsidized exchange rates in Iran has made imports unviable, affecting the Indian basmati trade.

Key Concepts Involved:

• Tariff: A tax imposed by a government on goods and services imported from other countries.
• Sanctions: Commercial and financial penalties applied by one or more countries against a targeted country, group, or individual.
• Subsidized Exchange Rate: A preferential exchange rate offered by a government, typically below the market rate, to encourage imports of essential goods.