Explained: Why basmati exporters are invoking ‘force majeure’ amid Gulf Crisis

What is ‘force majeure’, and what solutions are exporters seeking?

Force majeure is a legal principle that applies when unforeseen events — such as war, conflict, or major disruptions — make it impossible to fulfil contractual obligations. Exporters argue that the ongoing Gulf crisis since late February clearly meets this definition: they had already accepted export orders, completed production, and loaded and gated in containers before the situation escalated. They also cite the doctrine of frustration of contract, under which obligations become void if performance is no longer feasible.

Exporters have urged the government to formally recognise the situation as a force majeure event with effect from 1 March, and to direct an immediate waiver of detention, demurrage, and storage charges. They have also sought a prohibition on the retrospective imposition of war risk surcharges and other arbitrary crisis-related costs. Additionally, they want shipping lines to release or allow the return of containers without linking this to disputed payments. They have proposed the creation of a joint task force involving government authorities, shipping lines, and industry bodies to ensure real-time resolution and prevent further escalation.

Exporters stress that conventional legal remedies are not a practical option, as litigation is time-consuming, costly, and ill-suited to a crisis requiring immediate resolution.

The financial toll has been severe: working capital is blocked in stranded consignments, agricultural produce risks quality deterioration, and exporters face potential contractual defaults and reputational damage. In one reported case, a single exporter has been billed around ₹30 lakh despite repeated requests for relief. MSMEs, which lack the financial resilience to absorb such shocks, are particularly vulnerable. Exporters describe the situation as a national trade crisis, warning that without urgent government intervention, the consequences could extend to farmer incomes, agricultural value chains, and India’s standing as a dependable supplier in global markets.

How has the ongoing conflict disrupted exports?

The Middle East, a key market for Indian basmati rice, has been severely affected by disruptions to maritime routes, particularly through the Strait of Hormuz. By the end of January, India had already exported 5.4 million tonnes of basmati rice to around 150 countries, chiefly in the Middle East, with approximately one million tonnes more to be exported by the end of the 2025–26 financial year.

But with the escalation of the West Asian conflict in late February, nearly 60,000 tonnes of shipments became stranded at sea. Vessel movements have been suspended or reduced, trans-shipment operations curtailed, and major ports such as Jebel Ali are operating under restrictions. Several global shipping lines have unilaterally stopped bookings to affected destinations, leaving containers stranded at hubs such as ICD Ludhiana, ICD Dadri and Mundra Port.

Exporters claim that once cargo is handed over, it remains under the custody and control of shipping lines, and that delays caused by the suspension of services cannot be attributed to them. Despite this, shipping companies continue to levy detention, demurrage, and storage charges, as well as retrospective war risk surcharges on a daily basis.

Exporters further allege operational non-cooperation — including delays in issuing No Objection Certificates for container returns and slow responses to correspondence — which prolongs container cycles and inflates costs. They contend that shipping lines cannot impose charges arising from their own operational decisions or external disruptions, and that such practices constitute unjust enrichment at the expense of exporters.