Shares of LT Foods fell nearly 3% in Tuesday’s session, after former US President Donald Trump threatened to impose a 25% tariff on countries trading with Iran, triggering concerns around Indian basmati rice exports.
The selling pressure was seen across listed basmati rice exporters, even though the US market remains a relatively small part of India’s overall rice export basket.
What triggered the fall in LT Foods shares?
The decline in LT Foods stock came after the US announced a proposed 25% tariff on countries doing business with Iran. Given Iran’s importance as a key destination for Indian basmati rice, investors reacted cautiously to the potential impact on trade flows and payments.
Iran is among the top buyers of Indian basmati rice, making the tariff threat a headline risk for exporters with exposure to the region.
How important is the US market for Indian basmati exporters?
Despite the initial reaction, industry participants have indicated that the tariff announcement may not have a material impact on Indian exporters.
In FY24, India exported around 2.34 lakh tonnes of rice to the US, accounting for less than 5% of India’s global basmati exports. Traders have noted that the US is the least price-elastic market and remains a relatively small destination, making it easier for exporters to diversify shipments if required.
India’s rice trade exposure to Iran
Iran remains a major destination for Indian basmati rice. In FY25, India exported around 8.5 lakh tonnes of basmati rice to Iran, making it one of the largest buyers after Saudi Arabia and Iraq. Iran accounted for approximately 12–20% of India’s total basmati rice exports during the year.
For context, India’s total rice exports in FY25 stood at 21.55 million metric tonnes, marking a 19.4% year-on-year increase, highlighting the scale and diversification of India’s rice export market.
Stock movement across the sector
Alongside LT Foods, other basmati exporters also saw selling pressure. Shares of Chaman Lal Setia Exports declined around 3%, while KRBL was trading about 2% lower, reflecting a broader sector reaction to the tariff-related headline.
For now, the decline in LT Foods shares appears driven more by headline risk and short-term sentiment, rather than a fundamental shift in export demand, according to market participants.