War threatens India’s food exports to Gulf markets; 40% of rice shipments under threat

Iran war could have repercussion for India's food exporters

• India's food exports to Gulf face risk due to West Asia conflict
• Gulf markets crucial for rice, spices, fruits, and meat exports
• Strait of Hormuz tensions may disrupt shipping and raise costs

Did our AI summary help?

The war in West Asia is expected to cast a shadow over several of India’s food exports, particularly rice, spices, fruits and meat products, as the conflict threatens trade routes and demand across the Middle East.

The US-Israel and Iran war is set to enter its second week, with the conflict showing little sign of easing. Rising tensions around the Strait of Hormuz, a key maritime corridor linking the Gulf to global markets, could disrupt shipping flows and increase logistics costs for exporters.

A Moneycontrol analysis of trade data shows that several agricultural and processed food exports from India are heavily concentrated in countries around the Strait of Hormuz, making them vulnerable to any escalation in hostilities.

Rice exports heavily dependent on the region

Rice, India’s largest farm export, has substantial exposure to the Gulf region. In 2024, India exported rice worth about $11.05 billion globally, of which $4.08 billion, or roughly 37 percent, was shipped to Hormuz corridor nations, including Iran, Iraq, Saudi Arabia and the United Arab Emirates.

Iran alone imported about $698 million worth of Indian rice, while Iraq purchased over $929 million, making the region one of the most important markets for the commodity.

Spices and fruits even more exposed

Several high-value spice exports are even more dependent on the region. Of $194 million in global cardamom exports, nearly $147 million, or about 76 percent, was destined for Hormuz economies, highlighting the Gulf’s dominance in demand for the spice.

Fruit exports also show similar concentration. Bananas worth $353 million were exported globally, with $291 million, or more than 82 percent, going to Gulf markets.

Livestock products are even more dependent on the region. More than 99 percent of India’s sheep meat exports are shipped to Hormuz corridor countries.

Other products with high regional exposure include boneless bovine meat, with around 71 percent of exports heading to the Gulf, bird eggs with nearly 67 percent dependence, and capsicum, where about 66 percent of shipments go to the region.

Even widely consumed products such as dairy fats, sauces, tea and cashew nuts see 40-55 percent of exports linked to Gulf markets, indicating the breadth of India’s food trade exposure.

Processed foods and beverages also vulnerable

India’s processed food industry could also feel the impact. Around one-fifth of India’s exports of jams and jellies are concentrated in the region. The Gulf accounts for about 40 percent of India’s pasta exports worth $40 million, while potato chips exports show a similar share. Roughly one-seventh of India’s frozen potato products are also shipped to Middle Eastern markets.

Alcohol exports also exhibit a strong regional concentration. Nearly two-fifths of India’s whisky exports, worth $70 million in 2024, went to West Asia, with the UAE accounting for the largest share. The region also absorbed about half of India’s rum exports worth $20 million, 57 percent of vodka shipments, and two-thirds of India’s beer exports worth $25 million.

Even bottled water exporters could feel the impact, as about 45 percent of India’s bottled water exports worth $22.7 million were destined for the region.

While India’s total export exposure to the region was 14 percent, for agricultural goods and processed food, the share of West Asia was higher at 20 percent.

Trade vulnerability rising

The heavy concentration of India’s food exports in Gulf markets means disruptions in shipping lanes or logistics, particularly around the Strait of Hormuz, could significantly affect export flows.

Beyond logistics, prolonged geopolitical tensions could weaken demand in Gulf economies, which remain among the largest buyers of Indian agricultural and processed food products.