Iran has been an important market for Indian goods. In 2024, India exported products worth about 1.25 billion dollars to Iran. Indian exports include basmati rice, tea, sugar, pharmaceuticals, and electrical machinery.
But this war has disrupted these trade flows. Hundreds of thousands of tonnes of Indian basmati rice are currently stuck at ports or in transit, as shipping routes and insurance coverage have been disrupted.
The bigger concern is the Strait of Hormuz, a narrow sea route through which a large share of global oil and cargo passes. As Iran has blocked this route, ships carrying Indian exports to the Middle East and Europe are also bound to face delays. Even if Iran gives a safe passage to Indian ships, it is very risky to navigate through a war zone. This will lead to higher freight and insurance costs, and even cancellation of shipments.
Such disruption would not only reduce India’s exports to Iran but also affect trade with Gulf countries, Central Asia, and parts of Europe, increasing transport costs and creating uncertainty for Indian exporters.
In short, the Iran–Israel conflict could significantly reshape India’s trade routes, export markets, and shipping costs in the region.
Rajeev Upadhyay
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