With the conflict in West Asia entering its sixth day, Indian exporters are increasingly facing uncertainty over payments from importers in the Gulf region and rising demurrage charges amid growing numbers of West Asia-bound containers being stuck at Indian ports, The Indian Express has learnt. 

The disruption in trade has particularly affected rice shipments as the Gulf is one of the largest importers of Indian basmati rice, and shipments to West Asia typically rise during Ramadan. Saudi Arabia, Iraq, the UAE and Iran are among the largest importers of Indian rice.

The extent of the disruption

Various rice exporters estimated that about 2-4 lakh tonnes of rice are stuck at various nodes of the supply chain, and that there is a key meeting with the Commerce and Industry Ministry on Friday, after which some decisions could be taken to ease the challenges that the exporters are facing.

“Over 3000 rice containers are stuck at Indian ports. The shipments are stuck in three nodes: at Indian ports, in transit and at the destination port. Exporters have limited options available, and we have sought several support measures from the government, including the waiver of port charges,” Dev Garg, Vice President of the Indian Rice Exporters Federation (IREF), told The Indian Express.

“We have asked the authority for changes in various regulations that could help us call back our shipments. Exporters who have networks elsewhere, such as in North America, are trying to reroute their products. As far as demurrage charges are concerned, there is little clarity as to when the situation will ease, and therefore, estimating waivers for demurrage charges is a challenge, Garg said.

Earlier, Satish Goel, president of the All India Rice Exporters’ Association (AIREA), told this paper that about 2 lakh tonnes of basmati are stuck at Indian ports. Goel said that India exports nearly 60 lakh tonnes of basmati, out of which nearly 40 lakh tonnes go to the Gulf region.

Supply chain concerns

Rice exporters, in a presentation to the Commerce and Industry Ministry, said there is a sharp increase in the global average bunker fuel price or marine fuel oil (MFO) and an overall increase in freight cost.

“Disrupted trade flows have affected the circulation or repositioning of empty containers due to the crisis in West Asia. There is also a sharp surge in the global average bunker fuel price from about $520 per metric tonne to $700 per metric tonne. There is an overall increase of 15–20% in international Bulk freight costs & 40% in container freight,” IREF said.

The federation said that domestic basmati rice prices have also slipped 7–10% since the start of the crisis, adding pressure on exporters’ working capital and contracted realisations.

“Cargo space availability and fuel/risk charges remain highly uncertain and may escalate further in the coming days,” IREF said.

Force Majeure

Rice exporters have asked the Agricultural & Processed Food Products Export Development Authority (APEDA) to issue an official advisory/notification recognising the current Iran-crisis-linked shipping/logistics disruption as a force-majeure-type or exceptional circumstance. A force majeure clause, in legal parlance, typically excuses one or both parties from performance of the contract in some way following the occurrence of such events.

“Force Majeure will ease contractual performance issues and reduce undue pressure from buyers in the form of forced price reductions, penalties, or unilateral cancellations for circumstances beyond exporters’ control. It will also support exporters’ discussions with buyers, banks, insurers and logistics
partners,” exporters told the Indian Express.

Exporters said that they also asked the government to direct banks to provide temporary working capital support or ad-hoc facilities, and suitable time-bound
relaxations to ease shortages arising from the current disruption, similar to support extended during the COVID period.

Inter-Ministerial Group formed

Meanwhile, Commerce and Industry Minister Piyush Goyal had said that a consultation meeting was held with all stakeholder Ministries on Tuesday with key logistics and trade facilitation partners to review the emerging geopolitical situation and its potential impact on India’s Exports and Imports.

“In this context, the ‘Inter-Ministerial Group (IMG) for Supply Chain Resilience’ has been created, comprising members from Department of Financial Services, Ministry of External Affairs, Ministry of Shipping, Ports & Waterways, Ministry of Petroleum & Natural Gas and Central Board of Indirect Taxes & Customs, to facilitate effective coordination, monitoring and follow-up,” Goyal as per a statement.

Developments in Iran and the United Arab Emirates can have an immediate impact on bunker (ship fuel) prices and, if oil prices rise, may also disrupt container and bulk vessel availability, the federation said, adding that in such circumstances, container and bulk freight could increase sharply at short notice, exposing exporters to losses on fixed delivered-price contracts.

“The situation may also lead to a steep increase in insurance premiums. Exporters are also advised to exercise restraint while concluding new orders and to avoid open-ended, unhedged positions. India’s rice trade with Africa and the Middle East together accounts for roughly half of the national rice exports. During April–December 2025, exports to the Middle East totalled 3.90 million MT and to Africa 7.16 million MT,” IREF said.