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India's Iran exports set to fall further due to Dubai halt, US sanctions

From Jerusalem Post · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Indian exporters anticipate a significant drop in exports to Iran, including rice, tea, and pharmaceuticals, due to new U.S. sanctions and the UAE's trade halt.
  • Trade between India and Iran has already fallen over 90% from its peak, with current exports largely limited to humanitarian exemptions.
  • Exporters face potential increases in freight, insurance, and payment costs, with Turkey emerging as a possible alternative trade route.

Indian exporters are bracing for a further decline in trade with Iran, as planned U.S. sanctions and the United Arab Emirates's suspension of trade activities threaten to disrupt key export routes. Rice, tea, and pharmaceutical shipments, which have largely passed through Dubai's port, are expected to be severely impacted.

We are already seeing indications that transactions and payment mechanisms traditionally routed through the UAE are exploring alternative jurisdictions.

— Dev GargVice president of the Indian Rice Exporters Federation, commenting on alternative trade routes.

India has historically been one of Iran's top trading partners, but bilateral trade has plummeted by over 90% from its 2018/19 peak of $17 billion. Current exports are primarily goods exempted on humanitarian grounds. Indian exporters are concerned that proposed U.S. sanctions, potentially announced soon, will further weaken trade already constrained by banking caution and shipping difficulties.

Any prolonged disruption in this corridor will have a much greater bearing on the basmati industry, especially on millers and exporters in northern India than on India's overall non-basmati rice trade.

— Dev GargVice president of the Indian Rice Exporters Federation, explaining the impact on the basmati rice industry.

The UAE's decision last week to suspend all trade, exchanges, and financial transactions with Iran until further notice has already prompted a search for alternative mechanisms. Dev Garg, vice president of the Indian Rice Exporters Federation, noted that payment and transaction routes traditionally using the UAE are exploring other jurisdictions, with Turkey being considered.

sales to Iran will be affected as a lot of that goes through the UAE.

— Prabhat BezboruahA senior tea planter and former chairman of the state-run Tea Board, on the impact on tea exports.

For India's basmati rice industry, particularly millers and exporters in northern India, any prolonged disruption to the UAE trade corridor could have a significant impact. In the first half of 2026, India exported $383.11 million of rice to Iran, making it the second-largest market for premium rice. Similarly, Indian tea exports to Iran totaled $14.34 million in the same period, with a substantial portion routed through the UAE. Exporters anticipate higher freight and insurance costs, and potential payment problems, even if food and pharmaceutical products receive exemptions.

We hope food and pharmaceutical products may receive exemptions, although exporters could still face higher freight, insurance and payment costs.

— Ajay SrivastavaOf the Global Trade Research Initiative, discussing potential challenges for exporters.
DistantNews Editorial

Originally published by Jerusalem Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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