India’s agricultural sector is facing a massive shadow of uncertainty as the escalating conflict in West Asia threatens to disrupt nearly $11.8 billion worth of food and farm exports.
According to a report released by the Global Trade Research Initiative (GTRI) on Saturday, the ongoing instability is already choking vital shipping lanes, leading to extraordinarily high insurance premiums that have left global trade somewhat paralysed.
For India, the stakes are remarkably high. In 2025 alone, West Asian nations accounted for 21.8% of the country’s total agricultural and food exports. As per the report, the west Asian nations have long been a ‘natural market’ for Indian produce due to its geographic proximity and a sizable Indian diaspora population driving the demand for home-grown staples.
Worst affected states: Punjab, Telangana and more
The most significant impact is being felt in the rice sector, which serves as the backbone of India’s trade with the Gulf. India exported $4.43 billion worth of rice to West Asia last year alone, representing a staggering 36.7% of its global rice shipments.
GTRI Founder Ajay Srivastava noted that these markets are absolutely crucial for rice producers across Punjab, Haryana, Uttar Pradesh, Andhra Pradesh, and Telangana.
Any prolonged disruption to these routes doesn’t just hurt the balance of trade; it directly threatens the livelihoods of farmers and food processors in these key agricultural belts.
A specialized market under threat
While grains are the primary concern, the crisis is also bleeding into specialized categories like dairy and beverages, where India has developed a deep dependence on West Asian buyers.
In 2025, India shipped $281.1 million in dairy products to the region, making up nearly 29% of its total global dairy exports.
The impact on the beverage sector is even more pronounced. Exports of alcoholic and non-alcoholic drinks reached $197.5 million, accounting for over 43% of India’s total exports in this category.
Fruits, Spice, Sugar: Key products caught in crosshairs
The disruption is not limited to a few items. A wide variety of high-value shipments are now navigating a landscape of rising costs and uncertain delivery timelines.
Last year, India exported $1.81 billion in meat and processed fish products, alongside $1.35 billion in sugar and cocoa preparations to the region.
The spice trade is equally vulnerable. Key exports including ginger, turmeric, nutmeg, and cardamom totaling hundreds of millions of dollars are currently caught in the crosshairs of the logistics crunch.
Even perishable goods like bananas ($396.5 million) and onions ($111 million) are at risk as shipping delays threaten the viability of the produce.
The “West Asia factor” has become a defining element of India’s export strategy over the last decade. As shipping routes become more dangerous and insurance costs continue to climb, Indian exporters are finding it increasingly difficult to maintain their margins.
GTRI further warns that if the crisis continues on this scale, it could produce damaging economic shockwaves that will be felt across the entire length and breadth of India.
“The ongoing conflict in West Asia, along with disruptions to shipping routes and rising insurance costs, is now creating uncertainty for exporters and could directly affect farmers and food processors across several Indian states,” Srivastava concluded.