Dubai halt pushes India's Iran exports further down on US curbs

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Dubai halt pushes India’s Iran exports further down on US curbs

August 25, 2026

DUBAI,— New U.S. sanctions on Iran, along with the United Arab Emirates’ suspension of trade with Tehran, threaten to hit Indian exports of rice, tea and pharmaceuticals, industry officials said Monday. Much of that trade has moved through Dubai’s port.

India remains one of Iran’s top five trading partners, though two way trade has fallen more than 90% from its 2018/19 peak of $17 billion.

Exports are now mostly limited to goods allowed for humanitarian reasons.

Exporters worry that U.S. President Donald Trump’s “economic D Day,” which was launched late Monday, could add further strain to trade already hurt by sanctions, wary banks, and shipping restrictions.

The UAE halted all trade, exchanges and financial dealings with Iran last week until further notice.

Dev Garg, vice president of the Indian Rice Exporters Federation, said payments once routed through the UAE are shifting to other places, pointing to Turkey as a possible option.

India exported $383.11 million worth of rice to Iran in the first half of 2026, its second largest foreign market for premium rice, including long grain basmati.

Garg said a lasting disruption would hurt the basmati trade most, especially millers and exporters in northern India, more than India’s wider non basmati rice business.

Until recently, Indian exporters were usually paid through an authorized Indian bank, with funds sent from a UAE trader’s account in dirhams, dollars or another approved currency.

The trader then collected payment separately from the Iranian buyer through compliant banking channels.

Iran purchased $14.34 million worth of tea from India during the first six months of 2026.

Prabhat Bezboruah, a senior tea planter and former chairman of the state run Tea Board, said tea sales will likely be hit since much of that trade also runs through the UAE.

A New Delhi based exporter said direct shipments could rise, but payment issues may worsen.

Ajay Srivastava of the Global Trade Research Initiative said India Iran trade fell sharply after earlier sanctions.

He said food and drug shipments may get exemptions, though exporters could face higher freight, insurance and payment costs.

Iran’s exports to India were led by crude oil worth about $707 million, with smaller amounts of liquefied petroleum gas, apples, dates, almonds and kiwi fruit in the first six months of 2026.

Officials said the crude oil imports were largely allowed under a U.S. exemption granted earlier this year, which may be hard to sustain.

(With files from Reuters)