Middle East unrest to significantly impact Indian basmati rice, fertilisers, and diamond sectors: Crisil Report

New Delhi [India], June 20 (ANI): The Indian Basmati rice sector is likely to have a significant impact, weighed down by ongoing uncertainties in the Middle East, according to a recent report by Crisil ratings.

Additionally, other sectors such as fertilisers and diamonds, both cut and polished can also witness some impact, but expected to be less than the basmati rice sector.

According to Crisil report, Iran and Israel accounts for approximately 14 per cent of Indian basmati rice exports in FY25, and it is expected to see limited impact on it due to the ongoing tensions.

"Additionally, India's ability to export to other countries in the Middle East, the US and Europe reduces demand risk. But a prolonged crisis can lead to possible delays in payment from counterparties in these regions, elongating the working capital cycle," the report added.

For domestic diamond polishers, Israel accounts nearly 4 per cent of total diamond exports last year, which makes Israel one of the main trading hubs. However, during the time of conflict, polishers can switch to alternative trading hubs such as Belgium and the United Arab Emirates, with ultimate buyers based in the US and Europe, which will help them to manage any adverse impact on the sector.

On the global crude aspect, the uncertainties have impacted global crude oil markets, with Brent hovering in the range of USD 73-76 per barrel (bbl) over the past one week, up from an average of USD 65 per bbl during April-May 2025.

Furthermore, prolonged and increasing uncertainties can lead to a rise in air/sea freight costs and insurance premiums for export/import-based sectors. (ANI)

(The story has come from a syndicated feed and has not been edited by the Tribune Staff.)