- By Kamakshi Bishnoi
- Sun, 12 Apr 2026 04:04 PM (IST)
- Source:JND
Indian coffee’s long-established market in cafes throughout West Asia, including Dubai, Riyadh, and Kuwait City, faces one of its largest threats in many years, as many industry officials are warning that almost 80 per cent of this market’s fastest growing export market could see disruptions because of rising air freight rates and pressure on major ocean shipping methods, according to Nikkei Asia.
Even the brief hope of stabilised conditions following a temporary US-Iran ceasefire has not translated into smoother trade flows. Shipping lanes remain volatile, and exporters say costs have surged to the point where profit margins are being heavily squeezed.
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A further setback to trade between the USA and Iran occurred after long diplomatic meetings in Islamabad, where, according to US Vice President JD Vance, the talks ended “without a deal,” citing Iran’s refusal to accept US demands related to its nuclear programme.
“Exporters could face as much as an 80 per cent loss of the West Asia market in the coming months,” HT quotes Ramesh Rajah, president of the Coffee Exporters Association of India, as saying to Nikkei Asia. “Shipments are being delayed, rerouted or stuck at trans-shipment points, while rising freight costs are squeezing margins,” he said.
The heart of the disruption in trade between Indian exporters and West Asian countries relates directly to the Strait of Hormuz, a key shipping path used by all parts of the world to ship energy and other goods around the world and to trade. Increased tensions in this area have caused shipments to be moved around, delayed, and congested at trans-shipment points, which has made West Asian countries less predictable for Indian exporters when attempting to trade goods.
It has been reported that the cost of freight has doubled since the beginning of the year due to the escalation of the conflict. The reliability of shipping routes has decreased; therefore, many buyers in Europe are now trying to find alternate sources of supply, for example, Uganda, due to doubts about India's future market share.
India's coffee industry has been on a growth spurt since approximately 1.14 billion USD in export earnings in 2023 to 2.13 billion USD in the latest year. There is a growing demand for Indian coffee globally, as well as an expansion into speciality coffee and value-added products.
Today, India produces around 3,50,000 to 3,70,000 metric tons of coffee per year, which is only 3.0 to 4.0 per cent of the worldwide coffee production. India grows almost entirely Robusta coffee, which accounts for approximately 70 per cent of the total production from India; however, India has developed premium coffees such as Monsooned Malabar, which will provide India with a specific niche market in Europe and other regions.
The importance of West Asia to Indian coffee exports has been increasing steadily as its share of exports from India has increased from 12.6 per cent ten years ago to 16.1 per cent in 2024. However, due to ongoing geopolitical instability in that region, there is concern that there could be a reversal of some of these gains and therefore threaten the future growth of one of the rapidly developing export markets.