India Gate sees limited impact for now, but flags possible basmati price hike if West Asia disruptions continue

The ongoing conflict in West Asia has disrupted India's basmati rice exports and raised logistics costs, prompting KRBL, maker of the India Gate brand, to warn that consumers could see modest price increases if the situation continues for another quarter or two. Even so, the company believes its strong premium positioning will help cushion the impact as it navigates geopolitical uncertainty and weather-related risks. 

India's basmati trade has been facing pressure in one of its largest overseas markets. According to the Finance Ministry's Monthly Economic Review for July 2026, basmati rice exports to West Asia declined 31.9% between February and May this year. While shipments to markets such as the UK, Turkey and the US increased, they were insufficient to offset the regional slowdown, resulting in a 15% decline in India's overall basmati exports. The report noted that basmati rice has been harder to redirect to alternative markets because of its heavy dependence on West Asia.

"There has been issues with market access, especially the Middle East, which is the core market for Indian basmati," Ayush Gupta, India business head at KRBL, told Fortune India. "The export business has gotten disrupted in the recent past."

Gupta said freight costs arising from the disruption have largely been passed on through contracts, while packaging costs have also risen. "As a brand, we have the leverage to absorb or work with it in the short term. But if this persists for another quarter or two, it will result in price increases for the customers." He estimated any increase linked to freight and packaging would likely be around 2% to 2.5%. 

However, the company expects the arrival of the new basmati crop later this year to soften raw material prices. Gupta said basmati prices are likely to decline by 12% to 14% during the October to December procurement season, which could offset higher logistics and packaging costs.

Weather remains another key variable

Apart from geopolitical disruptions, the delayed monsoon is another factor the industry is tracking closely. Gupta said it is still too early to assess the full impact on this year's crop.

"The primary basmati growing region, Punjab, is well irrigated. Even with low rainfall, harvest and yields remain intact. But parts of Haryana and western Uttar Pradesh can get affected," he said, adding that the actual impact on production will become clearer over the next month. Any decline in paddy output would push up raw material prices, which in turn could affect demand. 

KRBL, however, believes its premium positioning provides some insulation from volatility.

"We operate as a premium branded player. We are not working as a commodity. A lot of these price increases are easily transferred to the consumer because we sell branded products and consumers buy us regularly. The impact of such situations is minimal on us and we are kind of insulated because of our strong brand strength across the globe," Gupta said. 

KRBL currently derives around 70% of its revenue from the domestic market and the remaining 30% from international business. While exports remain an important part of the business, the company's immediate growth strategy is centred on India, where it is expanding beyond rice into adjacent food categories while continuing to ride the premiumisation trend.