A person familiar with the situation said on Thursday that India's exports risk a $4 billion to $5 billion shortfall this year as a result of trade restrictions on wheat, rice, and sugar, and that Red Sea raids may potentially affect basmati rice shipments.
India, the world's second-largest producer of wheat, rice, and sugar, has limited exports of these commodities in order to contain growing domestic costs.
If hostilities by Yemen's Houthi group continue, New Delhi may examine another route via Africa for basmati rice supplies, which might raise prices by 15% to 20%, according to the source.
The alternative method may also have an impact on India's shipments of long-grain rice to Egypt and Europe, according to the source, who spoke on the condition of anonymity because he was not permitted to speak on the subject.
According to Rajesh Agarwal, an assistant secretary in the trade ministry, India expects an increase in exports of other farm goods to offset the export deficit this year.
"If we remove agricultural commodities whose exports are controlled, like wheat and rice, exports are growing by over 4%," Agarwal told reporters at a news conference.
"So, despite the shortfall of about $4 billion to $5 billion that we face because of restrictions on sugar, wheat, rice, we should be able to meet last year's export levels," he told the audience.
According to APEDA data, exports of meat and dairy products, cereal preparations, and fruits and vegetables increased between April and November of this year.
