India’s Punjab Rice Millers Exporters Association has urged the government to explore the possibility of a “barter agreement” with Iran, proposing import of crude oil from Tehran in exchange for premium aromatic Basmati rice, with payments settled in Indian rupees.
In a letter addressed to Union Commerce Minister Piyush Goyal on March 31, association director Ashok Sethi highlighted the urgent need for concessions and subsidies to help basmati exporters overcome massive financial losses incurred since the outbreak of war.
Stating that the conflict involving the US, Israel, and Iran has resulted in an unprecedented crisis for rice exporters, Sethi suggested that India arrange a barter agreement for crude oil imports and rice exports using a rupee payment mechanism.
Stranded shipments
Noting that the US has already waived sanctions on Iran during the current West Asian conflict, Sethi said that the government should leverage a barter deal to ease India’s oil crisis and revive traditional trade ties with Iran.
“As the government has been negotiating with Iran for bringing LPG and oil through the Strait of Hormuz and already some ships/tankers reached India, the export of Basmati rice, particularly those stranded on high sea or at ports, should be part of the discussion so that these shipments can reach the destinations,” Sethi told businessline.
The Punjab Rice Millers Exporters Association requested a waiver of bank interest charged during the war period. Additionally, Sethi called for subsidies to cover the financial losses of exporters during the current crisis, adding that the government must ensure the protection of Basmati rice currently held at ports or on ships. He further pointed out the burden of exorbitant shipping, insurance, and logistics charges in his letter.
The war, which began on February 28 following attacks on Iran by US and Israeli forces, has triggered a severe crisis for the rice trade, as over 80 per cent of Punjab’s export shipments are destined for West Asian countries.
During the April-January period of 2025-26, Basmati rice exports reached 5.39 million tonnes (mt), an 11 per cent increase over the 4.84 mt recorded in the same period last year. However, value realisations are lower this year, with $4.68 billion recorded against $4.87 billion a year ago. For the full 2024-25 fiscal year, Basmati exports totaled 6.07 mt, valued at $5.94 billion.
Published on April 1, 2026
