- Basmati exporters urge stronger government oversight amid Gulf shipping disruptions
- Calls for faster implementation of Merchant Shipping Act, 2025 for clear maritime rules
- Shipping costs to Gulf have surged from $550 to as high as $3,000 per tonne recently
Basmati rice exporters have urged the government to step in with stronger regulatory oversight and faster maritime reforms as disruptions on Gulf shipping routes continue to strain export operations, raise uncertainty and squeeze margins across the sector.
Exporters are urging the government to move faster on operationalising the Merchant Shipping Act, 2025, arguing that India needs a predictable and transparent maritime framework as export volumes rise. They seek clear notice periods for freight and surcharge changes, a dedicated dispute resolution mechanism, and defined rules on what shipping lines can charge during disruptions.
Exporters say such maritime reform is critical to supporting India's ambition of becoming a trillion-dollar export economy, especially during geopolitical crises when the absence of predictable shipping rules can quickly erode competitiveness.
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"The immediate crisis has highlighted why exporters need predictability and transparency in shipping charges, especially during geopolitical disruptions," said Priyanka Mittal, Chairperson of the Basmati Rice Farmers and Exporters Development Forum. "Exporters should know upfront what costs apply and under what conditions charges can be revised, instead of discovering new levies after cargo has already moved."
The immediate trigger for exporter anxiety has been a sharp spike in shipping and operational costs. Industry representatives say basmati export quotes are currently being seen in a broad $1,100-$1,300 per tonne range in some cases, largely due to logistics rather than any shortage of rice. Freight to key Gulf destinations has jumped from around $550 earlier to as high as $3,000 in certain instances.
Exporters also face cascading costs from higher crude-linked inland transport, packaging inputs such as polypropylene bags and cartons, and rising working capital requirements amid billing uncertainty. Operationally, cargo delays and diversions have led to detention and demurrage charges, which exporters say can be extremely severe in some cases, particularly for smaller players.
Exporters say the ongoing instability in key West Asia routes has exposed structural weaknesses in India's shipping and freight framework, leaving them vulnerable to sudden cost escalations, delayed cargo movement and opaque charges imposed by global shipping lines. While basmati remains in demand in overseas markets, exporters warn that the current operating environment is becoming increasingly difficult, particularly for smaller firms.
Operational challenges have compounded the pressure. Exporters report cargo being delayed, diverted or stranded at ports, inland container depots and transshipment hubs, triggering detention and demurrage costs that continue to accumulate as shipments remain stuck. The uncertainty around billing timelines and additional surcharges has also intensified working capital stress, particularly for small and mid-sized exporters.
Mittal acknowledged that the Directorate General of Shipping has intervened by mediating disputes through a UID-based grievance system, appointing port-wise nodal officers, and facilitating waivers or relaxations of certain port charges at locations such as Mundra and JNPT. Mittal says these steps are timely and helpful, but ad-hoc relief cannot substitute for a predictable regulatory framework during prolonged geopolitical disruptions.
"The government and DG Shipping have been proactive and supportive, but dispute resolution cannot rely only on individual grievances," Mittal said. "What exporters need is an institutional framework that ensures reasonableness, advance notice for charge changes and a fast, dedicated dispute resolution mechanism."
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