Hormuz turmoil sends gold lower, disrupts India's tea and basmati exports

The latest flare-up of hostilities in the Gulf, impacting commercial shipping through the crucial Strait of Hormuz waterway has sent fresh shockwaves through India's commodity markets, triggering a sharp fall in gold and silver prices, disrupting tea and basmati rice exports, and raising concerns over higher freight costs and supply chain challenges for exporters.

MCX gold fell 0.99% or Rs1,421 to Rs 1,41,955 per 10 grams on Monday, while silver dropped 2.18% or Rs4,865 to Rs 2,17,799 per kg as investors grappled with uncertainty following the renewed disruption in one of the world's busiest energy and trade corridors.

In the international market, gold slipped nearly 2% to trade below $4,060 an ounce, while silver declined around 3% to about $58 per troy ounce.


The impact extended beyond precious metals. Tea exporters said shipments scheduled for West Asia have come to a standstill, while basmati rice exporters reported stranding of containers at Kandla and Mundra ports, raising fears of delayed deliveries and escalating logistics costs.

"The gold trade is now in a panic mode,” said Rajesh Rokde, chairman of the All India Gem & Jewellery Domestic Council. “First came the Prime Minister's appeal to stay away from gold, then customs duty was increased to 15% from 6%, and now uncertainty over the US-Iran conflict and the closure of the Strait of Hormuz has made precious metals extremely volatile. Uncertainty is too high now.”

Tea exporters warned that the disruption could hit one of India's fastest-growing export markets. India exported a record 285 million kg of tea in 2025, with the Gulf accounting for a significant share.

"Nearly 50% of India's orthodox tea exports are destined for Middle Eastern countries,” said Mohit Agarwal, director of Asian Tea & Exports. “The blockade of Hormuz and the sharp increase in freight rates through Red Sea routes have virtually brought exports to a standstill. Following Sunday's developments, exporters have stopped dispatching consignments, even though it is a peak period of exports. Containers are lying at Kolkata, Cochin, and Nhava Sheva ports.”

Basmati rice exporters echoed similar concerns, saying containers awaiting shipments at Kandla and Mundra ports can’t be dispatched until the situation eases. Exporters fear that a prolonged disruption could inflate freight charges, delay payments and squeeze margins, particularly for small and mid-sized firms.

“More than 50,000 tonnes of basmati rice are lying at the ports,” said Dev Garg, vice president of Indian Rice Exporters Federation.

Any prolonged closure of the strategic waterway could have a cascading impact on Indian exporters by increasing insurance premiums, shipping costs, and transit time for cargo bound for West Asia and Europe, said experts.

"India's mid-market has shown itself to be flexible, adaptive and resilient since the conflict began,” said Gopal Jain, managing director and CEO of Gaja Alternative Asset Management. “Companies are better prepared today to manage volatility in currencies, input costs, and supply chains. However, a prolonged closure of the Strait of Hormuz would once again test businesses through higher inflation, rising freight costs and pressure on margins.”