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, according to The Hindu BusinessLine.
Afghanistan's Basmati Sourcing Challenge
Afghanistan consumes nearly 0.5 million tonnes of Basmati rice 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 quoted by The Hindu BusinessLine. Currently, Afghanistan sources some Indian-origin Basmati indirectly through traders in Dubai and Iran, a route that adds to costs.
Meeting to Expand Direct Trade
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. 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. One option under discussion is delivery of rice through Iran's Bandar Abbas port, subject to agreement between the two governments.
"Afghan officials believe direct sourcing from India can make supplies more economical and reliable," an industry source who attended the meeting said.
Logistical and Diplomatic Hurdles
A key challenge remains the absence of formal diplomatic relations between New Delhi and the Taliban-led administration in Kabul. The industry source cautioned: "Without an established diplomatic framework, uncertainties will continue to surround any trade arrangement. Exporters also need assurance on payments before committing to larger volumes." Indian exporters remain cautious about travelling to Afghanistan despite requests from Afghan authorities for a trade delegation, the source added.
Export Data and Market Context
India's Basmati exports to Afghanistan have remained modest over the years, as shown in the table below:
| Period | Volume (tonnes) | Value |
|---|---|---|
| 2005-06 (first shipments) | 63 | Not specified |
| 2020-21 (highest) | 19,440 | ₹108.9 crore |
| April 2026 | 979 | ₹7.74 crore |
India's total Basmati exports in 2025-26 reached 6.52 million tonnes, up from 6.07 million tonnes a year earlier, according to the report. 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. In April 2026, the average realisation for Afghan-bound Basmati was around ₹79 per kg.
Pakistan exported about 0.8 million tonnes of Basmati rice in 2024-25, but industry officials estimate that a significant portion of rice shipped to Afghanistan under non-Basmati categories also contains blends of aromatic varieties.
Implications for Trade
A successful arrangement with Afghanistan could help India gain a foothold in a market historically dominated by Pakistani suppliers. For importers and exporters, the July meeting will be critical to resolve logistical, payment and diplomatic uncertainties. The use of Iran's Bandar Abbas port as a transit hub and potential barter settlements with Afghan dry fruits present practical pathways. However, until formal diplomatic recognition is established, Indian exporters may remain hesitant to commit large volumes, limiting the speed of the shift.
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