Indian and Afghan traders are expected to meet next month to work out modalities for expanding direct trade in Basmati rice, following preliminary discussions between officials of the two countries held last week under the facilitation of the PHD Chamber of Commerce and Industry.

The initiative comes at a time when Afghanistan is looking to diversify its sourcing of Basmati rice. The country consumes nearly 0.5 million tonnes of Basmati annually and has traditionally relied on supplies from Pakistan, aided by the advantage of a shared land border.

However, the current tensions between Afghanistan and Pakistan have prompted Kabul to explore alternative supply channels, including direct imports from India, according to industry sources.

Officials familiar with the discussions said representatives from the Afghan diplomatic mission in New Delhi participated in the meeting and expressed interest in increasing procurement of Indian Basmati. Afghanistan currently sources some Indian-origin Basmati indirectly through traders in Dubai and Iran, a route that adds to costs.

“Afghan officials believe direct sourcing from India can make supplies more economical and reliable,” an industry source who attended the meeting said. One option under discussion is delivery of rice through Iran's Bandar Abbas port, subject to agreement between the two governments.

Industry representatives said the proposed July meeting between exporters and importers will focus on issues such as logistics, payment mechanisms and possible barter arrangements. India imports substantial quantities of dry fruits from Afghanistan, opening up the possibility of structured trade settlements.

A key challenge, however, remains the absence of formal diplomatic relations between New Delhi and the Taliban-led administration in Kabul.

“Without an established diplomatic framework, uncertainties will continue to surround any trade arrangement. Exporters also need assurance on payments before committing to larger volumes,” the source said, adding that Indian exporters remain cautious about travelling to Afghanistan despite requests from Afghan authorities for a trade delegation.

India's Basmati exports to Afghanistan have remained modest over the years. Shipments first began in 2005-06, when about 63 tonnes were exported. After a brief hiatus, exports resumed in 2010-11 and have continued at relatively low levels since then.

The highest export volume was recorded in 2020-21, when India shipped 19,440 tonnes of Basmati rice worth ₹108.9 crore. In April 2026, exports stood at 979 tonnes valued at ₹7.74 crore, with average realisation of around ₹79 per kg.

The move assumes significance at a time when India is seeking to expand markets for Basmati rice. The country exported 6.52 million tonnes of the aromatic grain in 2025-26, up from 6.07 million tonnes a year earlier. However, export earnings declined to $5.67 billion from $5.94 billion due to lower prices, with average realisation falling to around ₹77 per kg.

Trade sources said a successful arrangement with Afghanistan could help India gain a foothold in a market that has historically been dominated by Pakistani suppliers. While Pakistan exported about 0.8 million tonnes of Basmati rice in 2024-25, industry officials estimate that a significant portion of rice shipped to Afghanistan under non-Basmati categories also contains blends of aromatic varieties.

Published on June 28, 2026