Chandigarh, March 2 -- The rice exporters from Punjab and Haryana are staring at payment delays and disruptions to shipments headed to Iran, Afghanistan and other Gulf countries following the US and Israeli military strikes on Iran. Iran has retaliated with drones and small-scale missile strikes, hitting several cities in the Middle East, adding to the instability. On Sunday, the association of Indian rice exporters advised its members to avoid entering into new 'cost, insurance and freight' (CIF) commitments to Iran and Gulf destinations amid escalating tensions in West Asia, warning that the situation could disrupt shipments and sharply increase freight and insurance costs. Under CIF agreements, sellers bear the costs, insurance and freight for cargo transported via waterways until it reaches the buyer's port. The advisory by the Indian Rice Exporters Federation (IREF) came after the United States and Israel launched a major attack on Iran on February 28, triggering fears of wider regional instability and possible restrictions on shipping through the Strait of Hormuz in the Persian Gulf. Both Punjab and Haryana contribute nearly 75% of the total premium aromatic basmati grain exported from the country. While Haryana's share roughly stands at 35%, Punjab accounts for 40% of the total exports. To be sure, India is the world's leading exporter of basmati rice, commanding over 70% of global production and exporting approximately 60 lakh tonnes, which is worth nearly Rs.50,000 crore. India exported approximately 60 lakh tonnes of basmati rice during 2024-25, with demand primarily driven by the Middle East and West Asian markets. Other major buyers include Iraq, the United Arab Emirates and the United States. "The war has led the shipping companies to halt their cargo vessels where they are, and the movement of material and grain loaded in these vessels has also been stopped," said Ranjit Singh Jossan, vice president of basmati exporters association in Punjab. He believes that if the war stretches, halting the trade, the losses for the exporters will mount and will also cause a fall in basmati prices, impacting the growers of the aromatic grain. This is the second blow to the exporters in two months, because in January, due to the imposition of sanctions on Iran by US authorities, the Iranian currency fell to an all-time low, after which the local government refused to support the food trade. The trade then stopped, and grain stocks worth Rs.2,000 crore were stuck. "Since the past three weeks, the trade scenario eased again but has again been disrupted," Jossan added. Rice exporters in Haryana also raised similar concerns. Karnal is the main hub of basmati exports, with Kaithal and Sonepat also contributing to the foreign shipments. "Some impact of the conflict on the trade has already started, " Sushil Kumar Jain, Rice Exporters Association's state unit president, said on Sunday. The shipments which were headed to Iran or even to Afghanistan via Iran's biggest port, Bandar Abbas, have been held up. "These shipments will remain stuck till the situation improves, and it will impact the market. Payments may also get delayed," Jain said. According to Ashok Sethi, director of basmati exporters association, the ongoing situation is like never before, and it might push traders into bankruptcy if the war stretches. "This is a major crisis as all shipment has been blocked at the high seas. It is Ramzan time when the exports are at their peak. At this stage All we can say is that the losses are huge, but it will take time to assess," he said. As per data from government of India's Agricultural and Processed Food Products Export Development Agency (APEDA), the basmati exports to Middle Eastern countries between April and December 2025 were Rs.27,197 crore, which largely includes Saudi Arabia, Iran, Iraq, UAE, and Yemen. During this time, though troubled, Iran alone imported premium grain worth Rs.6,000 crore. Neeraj Kumar, a rice miller from Karnal, said, "Since yesterday, there has been a situation of uncertainty after the conflict began. Within one day of the conflict, trade has impacted, causing a fall of nearly Rs.4-5 per kg in basmati rates, which accounts for Rs.400-500 per quintal." "Last time in June there was an impact," Kumar said, referring to the Iran-Israel conflict in June last year. "Iran is our biggest buyer of basmati, while it is also exported to other countries, including the UAE, Oman, Yemen and Iraq. The shipments for March will be affected. The actual impact on the trade will depend on how long the conflict lasts," he added. The announcement by Yemen's Houthi group to target cargo vessels in the Red Sea has increased risks along critical maritime trade routes. If tensions extend to the Strait of Hormuz, freight rates could surge sharply, shipment costs may rise, and supply chains could face significant disruption. Currency volatility may further impact export margins. With the threat from Yeman-based radical Houthis group that cargo vessels from nations other than the allies of Iran will be destroyed, it has also negatively impacted the trade to Europe, Canada and the USA via the Red Sea, making basmati export come to a complete standstill. Further, according to Jossan, Iran's largest operational seaport, Bandar Abbas, a vital trans-shipment hub connecting Afghanistan, Turkmenistan, Turkey, Uzbekistan, Tajikistan, Armenia, and parts of Russia, has also been declared non-functional for commerce and trade. He added that huge stocks worth hundreds of crores are in transit, and if the situation continued the grain quality will also suffer. Meanwhile, IREF advised exporters to conclude sales on 'free-on-board' (FOB) terms wherever feasible so that freight, insurance and related risks remain with international buyers. The federation noted that five of the leading Basmati destinations -- Saudi Arabia, Iran, Iraq, the United Arab Emirates and Yemen -- are located in West Asia and together account for around 50% of India's Basmati exports....