When there was no war, the rice mills of Madhya Pradesh’s Raisen district would hum through the night in March. The Pusa basmati, long-grained, fragrant, destined for the dinner tables of Tehran and Riyadh, would tumble through milling machines in the industrial clusters of Mandideep, Satlapur and Obedullaganj, getting sorted into cream and golden sella varieties, loaded into containers at Nhava Sheva in Navi Mumbai, and sailing into the Persian Gulf just in time to stock up for Ramzan.
This year, the machines have gone quiet.
Since the United States and Israel launched coordinated airstrikes on Iran on February 28, triggering a military conflict across the Middle East, farmers, millers and exporters of Raisen, a district that has quietly built one of India’s most significant basmati export clusters along the banks of the Narmada, have found themselves crushed under the weight of a defaulted trade.
“At the commodity level, almost all shipments are on hold,” said Rahul Jain, one of Raisen’s largest rice exporters. “Even consignments already in transit have been halted. We are being penalised as shipping costs have increased, while prices have not risen significantly. Our monthly turnover of Rs 20–25 crore is effectively frozen.”
The district, spread across the fertile Narmada valley, about 40 kilometres from Bhopal, cultivates paddy across approximately 3.45 lakh hectares and produces over 6 lakh tonnes of rice annually. More than two dozen rice factories now operate across the district’s industrial pockets: Mandideep, Satlapur, Obedullaganj, Bareilly, Udaypura and Umraoganj.
The Narmada valley’s alluvial soil, access to irrigation, and proximity to central India’s road and rail networks made Raisen a logical staging post for a commodity whose final buyers were overwhelmingly in West Asia.
India’s basmati rice export machine had, until the war, been running at a record pace. According to data from the Directorate General of Commercial Intelligence and Statistics, India exported nearly 60.65 lakh metric tonnes of basmati rice worth Rs 50,312 crore (approximately USD 5.87 billion) in the 2024-25 fiscal year, up 15.7 per cent in volume from the year before. The country commands over 70 per cent of global basmati production and exports to 154 countries.
Dependence on the Middle East
But the concentration of this trade in the Middle East makes the sector acutely vulnerable to what is now unfolding. According to APEDA data for 2024-25, Saudi Arabia was the single largest buyer of Indian basmati at 11.73 lakh metric tonnes, followed by Iraq at 9.05 lakh metric tonnes and Iran at 8.55 lakh metric tonnes. The top five destinations — Saudi Arabia, Iraq, Iran, UAE and Yemen — together account for nearly half of all Indian basmati exports. Between April and December 2025 alone, exports to West Asian countries stood at Rs 27,197 crore.
The freight shock has been extraordinary. Raisen-based exporters have said the container freight rates that were tracking at around USD 2,500 per unit before the crisis have spiked to between USD 7,000 and 9,000. Freight rates overall have climbed more than 30 per cent, and container availability has collapsed.
Mithlesh Soni, a Raisen-based exporter, said he is unable to locate 40 containers of his own rice, somewhere at sea. “We are unable to track our shipment. Forty containers are on a vessel, but there is no clarity on where they are or when they will reach,” he said.
The scale of India’s exposure to West Asia in basmati exports is not simply a story of overdependence. It is, exporters say, a structural reality: the Gulf is the only market that actually wants what Raisen produces.
Jain explains, “Europe and the US do not accept the same variety consumed by Iran and Saudi Arabia, while Africa largely imports cheaper rice. There is effectively no alternate buyer for this stock.” The consequence is that an estimated 10 lakh tonnes of basmati rice, already milled and sitting in warehouses and at ports across India, cannot simply be rerouted.
The seasonality of the crisis makes it worse. March and April are peak loading months for the Gulf, the period when Middle Eastern buyers stock up ahead of Ramzan and Eid, when rice consumption surges across Muslim households from Tehran to Riyadh. “Demand in the Middle East typically rises ahead of Ramzan, when countries stock up in anticipation of higher consumption,” Jain explained. “Shipment time is around 12 days, but in the current situation, there is no clarity on when normalcy will return.”
Abdul Ali, director of Royal Green Pvt. Ltd. and an exporter who sells exclusively to Iran-based markets, confirmed the picture from his side of the ledger. “Our primary market has always been the Middle East. Rice is a staple commodity, so we expect demand to return, but the uncertainty is the biggest concern,” he said. His operations are currently running at a fraction of capacity. “Nearly 80–90 per cent of operations are down across all locations. Movement from ports has reduced drastically, containers have been called back, and our stocks are being held up.”
Ali places his hopes on diplomatic measures being explored. “We are relying on food corridors being worked on by Dubai and the UAE authorities to help resume shipments. However, logistics and payments remain our biggest challenges at the moment,” he said. Banking channels, he noted, are still functioning for now — but the overall system is under stress.
“There has been a disruption of 20-25 days,” Ali said, “and buyers are trying to assess the situation before committing further.”
The burden on rice producers
The human consequence of this standstill is most visible in the inventory numbers exporters carry and the debt that sits behind them.
Jain himself currently holds approximately 3,000 tonnes of processed rice stock and around 30,000 tonnes of paddy, which would typically yield around 20,000 tonnes of milled rice. He has stopped processing entirely. “What will we do with the output if markets remain shut?” he asked. The loans behind this inventory are Rs 150 crore. “We have repayment obligations, and at least a two-month EMI waiver is needed to manage this crisis,” he said.
Hansraj Soni, a Raisen-based exporter, has been trying to move 300 tonnes of basmati rice and hopes that alternate shipping routes will soon appear. “Shipping lines are imposing surcharges of USD 2,000-2,500 per container, and buyers are refusing to bear these costs. We are left to absorb them,” he said. Consignments originally cleared for Saudi ports like Dammam are being rerouted to Jeddah, with every additional nautical mile charged back to Indian exporters. “Around 35 of my containers are stuck in this situation. We feel completely trapped in this scenario,” he said.
Soni said insurers have stopped covering shipments under current conditions. “I am already looking at a loss of around Rs 2 lakh per container for 10 containers, and the losses will only increase,” he said.
Prices have already begun to move. Pusa basmati has fallen by Rs 300-500 per quintal in the wholesale market. At the farm gate, the per quintal price is being projected to decline from around Rs 1,800 to Rs 1,600. Basmati prices broadly have already fallen 8-10 per cent, according to Jain. “If exporters are unable to sell, banks will soon begin pressing for loan repayments,” he said.
Manoj Soni, operator of a rice factory in Raisen, summarised the secondary damage with the directness of someone watching the downstream cascade in real time: “The price of Pusa rice has fallen by Rs 300-500 per quintal. This has disrupted and reduced the arrival of paddy and raw materials, weakening the supply chain. It has distressed farmers. If the war continues for a long time, small- and medium-sized industries will be particularly affected.”
Not every exporter in Raisen is simply waiting. Among those already moving to adapt is Udit Maheshwari, associated with one of the district’s larger rice-exporting firms, which handles around 70,000 tonnes annually. For him, the crisis has accelerated a strategic pivot toward European markets that was already underway.
“Freight surcharges have increased sharply, and that is hitting us the most. Only about 20 per cent of the rice stock is currently moving. Until the Strait of Hormuz reopens fully, disruptions will continue,” Maheshwari said. But rather than waiting, his firm is routing some shipments to Europe through African corridors and ports like Jeddah. The detour is expensive as it adds 20 to 25 days to transit time and represents a harder route to a market that, in any case, demands a different variety of rice than the cream sella bound for Iran.
“Routes will change, but they will be more expensive. Buyers will try to pass on the additional costs to sellers,” he said, with measured realism. “Post-Ramzan, the loading season will pick up, and June-July shipments are being lined up for Europe. For now, it is about adapting to the situation and waiting for clarity.”
An estimated 10 lakh tonnes of basmati rice, already milled and sitting in warehouses and at ports across India, cannot simply be rerouted. (File Photo) 
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