New US sanctions on Iran threaten India’s USD 1.63-billion bilateral trade, leaving 1,00,000 tonnes of basmati rice stuck and forcing exporters to seek safer and much costlier routes.

New US sanctions on Iran threaten India’s USD 1.63-billion bilateral trade. |

New Delhi: The Trump administration has announced against Iran. The plan aims to weaken Iran’s economy through severe sanctions.

Washington has also warned countries that continue trading with Tehran that they could face secondary sanctions. This has created a risk for India’s basmati rice exporters.

.@SecScottBessent spoke today with Bahrain’s Minister of Finance and National Economy, H.E. Shaikh Salman bin Khalifa Al Khalifa, to discuss Operation Economic Outcast.



Secretary Bessent stressed that Iran must not be permitted to threaten international commerce or use the…

— Treasury Department (@USTreasury) August 26, 2026

Iran is the second-largest buyer of Indian basmati rice and accounts for around 18-20 percent of India’s exports. The new restrictions could affect nearly USD 1.63 billion in bilateral trade between India and Iran.

Treasury Secretary Scott Bessent announces Operation Economic Outcast, aimed at cutting off sources of revenue to the Iranian regime.



“We are enforcing a zero leakage approach,” Bessent said, warning other countries against facilitating Iran’s oil trade, financial transactions… pic.twitter.com/WzjV3dC0P9

— CBS News (@CBSNews) August 24, 2026

Dubai Route Closes

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has stopped trade, commercial dealings and financial transactions with Iran. The UAE was an important route for Indian exports, including rice, tea and medicines.

A large share of India’s basmati shipments to Iran moved through Dubai ports. US Treasury Secretary Scott Bessent’s warning of action against countries trading with Iran has increased uncertainty.

Rice Stranded At Ports

India exported rice worth USD 383.11 million to Iran during the first six months of 2026, according to a Reuters report. Iran is a major market for premium Indian rice, including long-grain basmati.

About 1,00,000 tonnes of basmati meant for Iran is stuck at Gujarat’s Kandla and Mundra ports because of West Asian tensions and fears over US sanctions.

With the Dubai route unavailable, exporters are considering alternatives such as Turkey. The Indian Rice Exporters Federation said these routes could significantly increase delivery times and freight costs.

Will India Follow Washington?

Geostrategist Brahma Chellaney said the success of US sanctions depends largely on China, Iran’s biggest oil buyer. China has repeatedly ignored American restrictions on Tehran.

The Trump administration’s attempt to strangle Iran economically through newly announced secondary sanctions hinges on securing China’s cooperation. Beijing has long defied U.S. sanctions on Tehran, emerging as Iran’s largest trading partner and foreign investor, as well as the…

— Dr. Brahma Chellaney (@Chellaney) August 25, 2026

India, however, may follow the US position. It stopped importing Iranian crude oil in 2019 and sharply reduced Russian oil purchases from last October.

If basmati exports to Iran stop, exporters could suffer heavy losses. However, unsold rice may enter Indian markets, increasing domestic supply and lowering prices. Premium basmati could then become more affordable for Indian households.

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