- Higher freight and marine insurance costs, shipping disruption weigh
- Cautious buying in West Asia impacts on India’s rice export growth
India’s rice exports grew just 2.17% y-o-y to $4.81 billion during April-August 2026-27, as the continuing West Asia conflict disrupted shipping routes and increased freight and marine insurance costs. August rice exports were valued at $0.91 billion, up 4.12% year-on-year.
West Asian buyers limit purchases
Buyers in Saudi Arabia, the UAE and other West Asian markets are largely purchasing rice because of immediate requirements instead of building larger inventories. Continued uncertainty around cargo movement through the Strait of Hormuz has contributed to the cautious approach. Disruptions at ports including Iraq, Kuwait, Bahrain, Qatar, Dammam and Jebel Ali have also affected shipment planning.
Freight and insurance costs rise
Indian exporters have faced a sharp increase in ocean freight and marine insurance costs since February. Freight charges to several Middle Eastern destinations have reportedly increased by 10-30 times. Alternative shipping routes have increased transit times and added to logistics expenses. Concerns around the Bab el-Mandeb route and security risks near Jeddah have further complicated cargo movement.
Prolonged disruption could affect wider exports
Prolonged disruption could eventually affect shipments to Europe and other global markets, in addition to West Asian destinations. The concern for exporters therefore extends beyond higher costs on Middle East-bound shipments. Continued disruption across major maritime routes could affect the movement and competitiveness of Indian agricultural exports more broadly.
India remains largest rice exporter
India accounts for around 45% of global rice trade and exports Basmati and non-Basmati rice to more than 140 countries across Asia, West Asia, Europe and the US. The US Department of Agriculture estimated India’s rice exports at 23 million tonnes in 2025-26, compared with 22.83 million tonnes in the previous year. However, the value of India’s rice exports declined 7.5% year-on-year to $11.53 billion in FY26.
Outlook
India’s rice export growth is likely to remain sensitive to freight rates, marine insurance costs and the stability of key West Asian shipping routes. If disruptions persist, higher logistics costs and cautious buying could continue to limit shipment growth. However, India’s broad export destination base and large export volumes provide some support. The key factor for the near-term will be whether maritime disruptions ease or continue to constrain cargo movement and raise shipping costs.
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