Background Context
The history of Indian rice exports, particularly basmati, is intertwined with the Green Revolution of the 1960s and 70s, which significantly boosted rice production. Prior to this, India was often a net importer of food grains. The development of high-yielding varieties and improved irrigation techniques transformed India into a major agricultural exporter. Basmati rice, with its unique aroma and long grain, gained international recognition, especially in the Middle East. The Agricultural and Processed Food Products Export Development Authority (APEDA) plays a crucial role in promoting and regulating basmati rice exports, ensuring quality standards and protecting geographical indication (GI) rights. Trade agreements and geopolitical relations have also shaped the dynamics of rice exports, with Iran emerging as a significant market due to historical ties and trade preferences.
Current Developments
In recent years, India's rice exports have faced challenges due to fluctuating global prices, competition from other rice-producing nations like Thailand and Vietnam, and non-tariff barriers imposed by importing countries. The COVID-19 pandemic disrupted supply chains and altered consumption patterns, impacting export volumes and values. Geopolitical tensions, such as sanctions and trade wars, have also influenced the direction and volume of rice exports. The government has been actively promoting diversification of export markets and value-added rice products to enhance competitiveness. Furthermore, there's increasing focus on sustainable rice cultivation practices to meet environmental standards and consumer preferences in developed countries. The rise of private labels and e-commerce platforms has also created new opportunities and challenges for Indian rice exporters.
Practice MCQs
Question 1
Consider the following statements regarding India's basmati rice exports:
1. Iran is a major importer of Indian basmati rice.
2. The Indian Rice Exporters Federation (IREF) regulates the price of basmati rice in the international market.
3. Basmati rice exports to Iran constituted a significant portion of India's total basmati exports during April-November of the 2025-26 financial year.
Which of the statements given above is/are correct?
- 1 and 2 only
- 1 and 3 only
- 2 and 3 only
- 1, 2 and 3
Explanation: Statement 1 is correct as Iran is a major importer. Statement 3 is correct as the exports to Iran were significant. Statement 2 is incorrect as IREF advises its members but does not regulate prices.
Question 2
Which of the following factors could potentially impact India's basmati rice exports to Iran in the near future?
1. Changes in Iran's domestic agricultural policies.
2. Fluctuations in global rice prices.
3. Imposition of new sanctions on Iran by international bodies.
Select the correct answer using the code given below:
- 1 only
- 2 and 3 only
- 1 and 3 only
- 1, 2 and 3
Explanation: All three factors can impact exports. Changes in Iran's policies can affect import demand. Global price fluctuations impact competitiveness. Sanctions can disrupt trade and payment mechanisms.
Question 3
Assertion (A): Civil unrest in Iran can negatively impact India's basmati rice exports.
Reason (R): Political instability often disrupts trade and financial transactions, leading to payment delays and uncertainty for exporters.
In the context of the above statements, which of the following is correct?
- Both A and R are true and R is the correct explanation of A
- Both A and R are true but R is NOT the correct explanation of A
- A is true but R is false
- A is false but R is true
Explanation: Both the assertion and reason are true, and the reason correctly explains why civil unrest can impact exports.
Previous Year Questions
PYQ 1 - UPSC Prelims 2023 2023
Which of the following statements is/are correct regarding India's basmati rice exports to Iran, as per the given news?
- (a) Iran is not a significant importer of Indian basmati rice.
- (b) During April-November 2025-26, India exported 5.99 lakh tonnes of basmati rice worth $468.10 million to Iran.
- (c) The Indian Rice Exporters Federation (IREF) has encouraged its members to increase credit exposure to Iranian importers.
- (d) Basmati prices have increased in Indian markets due to the payment issues.
Explanation: The news explicitly states that India exported 5.99 lakh tonnes of basmati rice worth $468.10 million to Iran during April-November 2025-26. Iran is a major importer, IREF advised caution, and basmati prices have softened.
PYQ 2 - UPSC Mains 2023 2023
Discuss the potential impact of payment delays from Iranian importers on the Indian basmati rice export sector. What measures can the Indian government take to mitigate these risks and support the exporters?
PYQ 3 - SSC CGL 2023 2023
As per the news report, what was the approximate value of India's basmati rice exports to Iran during April-November 2025-26?
- (a) $368.10 million
- (b) $400 million
- (c) $468.10 million
- (d) $500 million
Explanation: The news report states that the value was $468.10 million.
PYQ 4 - SSC CHSL 2023 2023
Which organization has advised its members to exercise caution regarding credit exposure and shipment timelines related to basmati rice exports to Iran?
- (a) APEDA
- (b) Indian Rice Exporters Federation (IREF)
- (c) Ministry of Commerce
- (d) RBI
Explanation: The Indian Rice Exporters Federation (IREF) has advised its members to exercise caution.
PYQ 5 - IBPS PO 2023 2023
What is the primary concern for Indian rice exporters regarding trade with Iran, as highlighted in the news?
- (a) Increased competition from other rice-exporting countries
- (b) Pending payments from Iranian importers due to civil unrest
- (c) High transportation costs
- (d) Stringent quality control measures imposed by Iran
Explanation: The primary concern is the pending payments from Iranian importers due to civil unrest.
PYQ 6 - SBI PO 2023 2023
Which of the following measures would be MOST effective in mitigating the risk of non-payment from Iranian importers for Indian rice exporters?
- (a) Increasing the volume of rice exports to Iran
- (b) Insisting on advance payments or letters of credit
- (c) Reducing the price of basmati rice
- (d) Ignoring the advice of IREF
Explanation: Insisting on advance payments or letters of credit would be the most effective way to mitigate the risk of non-payment.
PYQ 7 - CDS 2023 2023
The term 'credit exposure' in the context of the news refers to:
- (a) The total amount of rice exported
- (b) The risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations
- (c) The profit margin on rice exports
- (d) The cost of transporting rice to Iran
Explanation: 'Credit exposure' refers to the risk of loss arising from a borrower's failure to repay a loan or meet contractual obligations.
PYQ 8 - CDS 2023 2023
Which of the following factors is NOT directly mentioned as a cause for concern in the news regarding India's basmati rice exports to Iran?
- (a) Civil unrest in Iran
- (b) Pending payments from Iranian importers
- (c) Softening of basmati prices in Indian markets
- (d) Increased import duties imposed by Iran
Explanation: Increased import duties imposed by Iran is not directly mentioned in the news as a cause for concern.