India’s basmati rice exporters are looking to bulk shipping to reduce freight expenses and strengthen their position in one of their most important overseas markets. The Indian Rice Exporters’ Federation (IREF) has introduced a shipping initiative with Singapore-based Eximwala Solutions Pte. Ltd. that aims to transport 102,210 metric tonnes of basmati rice to Iraq through three vessels. The arrangement targets a reduction in freight costs from approximately $350 to $90 per tonne.
The initiative comes as rising shipping expenses, container shortages and geopolitical disruptions put pressure on trade routes connecting India with the Middle East. The region accounted for ₹34,284 crore in Indian basmati exports in FY2025–26, making freight efficiency an important factor for exporters, overseas buyers and the wider rice supply chain. The proposed model could offer a way to manage transportation costs, although its wider benefits will depend on execution and the commercial terms available to individual exporters.
Key Takeaways
- Freight target: The bulk-shipping arrangement aims to bring quoted freight costs down from $350 to $90 per tonne.
- Shipment volume: The plan covers 102,210 metric tonnes of basmati rice across three vessels.
- Major export market: India shipped 45.64 lakh metric tonnes of basmati rice worth ₹34,284 crore to the Middle East in FY2025–26.
- Iraq’s role: Iraq imported approximately 7.64 lakh tonnes of Indian basmati rice during the financial year.
- Potential benefit: Lower freight expenses could improve price competitiveness and support exporter margins, depending on actual costs and contract terms.
India’s Basmati Export Market: The Numbers Behind the Plan
The Middle East is a critical destination for India’s basmati rice industry. According to figures cited by IREF, the region accounted for nearly 70% of India’s total basmati export volume in FY2025–26.
The scale of the market explains why shipping costs matter. When transportation becomes more expensive, exporters must decide whether to absorb the increase, negotiate with buyers or raise selling prices. Each option can affect profitability or competitiveness.
India’s rice exports to the Middle East
| Indicator | FY2025–26 figure |
|---|---|
| Basmati rice exported to the region | 45.64 lakh tonnes |
| Value of basmati exports | ₹34,284 crore |
| Total rice exports, including non-basmati | 56.48 lakh tonnes |
| Total rice export value, including non-basmati | ₹39,657 crore |
| Share of India’s basmati export volume represented by the region | Nearly 70% |
Source: Figures cited by the Indian Rice Exporters’ Federation and reported by The Economic Times.
These figures cover the Middle East as a region, not Iraq alone. They demonstrate the broader commercial importance of the market and why improving freight efficiency could have consequences beyond a single shipping arrangement.
How the Iraq Bulk-Shipping Initiative Works
Under the initiative, IREF is collaborating with Singapore-based Eximwala Solutions to organise bulk shipments of basmati rice to Iraq. Instead of relying entirely on container-based transportation, the arrangement uses vessels carrying large quantities of rice.
The objective is to reduce the transportation cost per tonne by moving a substantial volume of cargo through a coordinated shipping plan. Large shipments can spread certain transportation expenses over more tonnes, potentially improving unit economics.
IREF has cited container freight quotations of around $350 per metric tonne for Iraq. The bulk-shipping initiative aims to bring the rate to approximately $90 per tonne.
Freight cost comparison
| Measure | Container freight reference | Target under bulk shipping |
|---|---|---|
| Freight cost per tonne | $350 | $90 |
| Difference per tonne | — | $260 |
| Target reduction | — | Approximately 74.3% |
The percentage reduction is calculated from the quoted rates: a $260 saving against a $350 reference cost equals approximately 74.3%.
The comparison is based on the freight figures reported for the initiative. The final all-in cost for an exporter may also depend on loading, unloading, port handling, insurance, inland transportation, storage and other contractual charges. Consequently, the quoted reduction should not automatically be interpreted as an equivalent fall in every exporter’s total logistics bill.
Potential Savings From the Three-Vessel Plan
The planned shipment volume of 102,210 tonnes gives the initiative meaningful scale. If the full volume receives the stated $260-per-tonne freight difference, the arithmetic implies potential gross freight savings of approximately $26.57 million.
| Calculation | Estimate |
|---|---|
| Planned shipment volume | 102,210 tonnes |
| Quoted freight difference | $260 per tonne |
| Indicative gross savings | $26.57 million |
| Equivalent in Indian currency | Depends on the applicable exchange rate |
This is a calculation based on the reported target rates and shipment volume, rather than a confirmed realised saving. Actual savings will depend on the final freight contracts, shipment execution and any additional expenses associated with bulk handling.
Even so, the potential difference illustrates why logistics has become a strategic issue for agricultural exporters. When cargo volumes are large, a change of even a few dollars per tonne can have a material impact on costs.
Iraq Remains an Important Buyer of Indian Basmati Rice
Iraq is a significant destination within the broader Middle Eastern market. IREF figures reported by The Economic Times indicate that Iraq imported approximately 7.64 lakh tonnes of Indian basmati rice in FY2025–26.
The value of India’s basmati exports to Iraq was reported at ₹5,583 crore during the year. Saudi Arabia was the region’s largest destination by value, at ₹8,324 crore, followed by Iran at ₹6,970 crore. The United Arab Emirates accounted for ₹4,132 crore.
These figures underline the importance of maintaining reliable and competitive shipping arrangements across several destinations. A logistics model developed for Iraq could provide lessons for other Gulf markets if it proves commercially viable.
However, freight arrangements cannot remove every barrier to trade. Import requirements, buyer demand, quality specifications, payment terms, port conditions and regional security risks will continue to influence shipment decisions.
Why Bulk Shipping Could Help Exporters
1. Lower transportation expenses
Freight is one component of the delivered cost of rice. A lower rate can give exporters more room to negotiate prices with importers or protect margins when market competition limits their ability to raise prices.
The extent of the benefit will vary by exporter, shipment contract and final delivery cost.
2. Greater pricing flexibility
Rice exporters compete on quality, consistency, price and dependable delivery. If transportation becomes less expensive, a supplier may be able to offer a more competitive delivered price without reducing the underlying price paid to the producer or processor.
Alternatively, the
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