West Asia Crisis Disrupts India's Egg Export Market Amid Sharp Decline in Gulf Shipments

India's Egg Export Market Faces Disruption Due to Conflict in West Asia

India's egg export market is beginning to feel the impact of the conflict in West Asia, with shipments to key Gulf destinations slowing sharply as freight costs rise and trade routes face disruption. Exports of India's poultry products declined nearly 20 percent in March, according to trade data. Shipments to the United Arab Emirates fell 19 percent year-on-year, while exports to Oman collapsed by almost 90 percent.

The decline is significant because the Gulf region remains the dominant market for India's egg exports, particularly for producers based in Tamil Nadu. In FY26, more than 82 percent of India's egg exports were destined for Gulf countries. The UAE alone accounted for $115 million of exports, while Oman imported $26.8 million worth of Indian poultry products. Tamil Nadu's Namakkal poultry belt, which anchors a large share of India's egg exports, has been particularly affected.

A sharp increase in freight rates and shortages of shipping containers have disrupted export economics, making it difficult for exporters to send eggs overseas. The stress is not limited to exports; the crisis is also expected to raise costs for Indian consumers as poultry producers grapple with rising input prices. Prices of corn and soybeans, key ingredients in poultry feed, have nearly doubled in recent months.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Industry executives expect supplies to remain tight until the next harvest cycle in October-November, which will keep pressure on poultry farmers. Higher fuel prices have added another layer of strain by increasing transportation and packaging costs. Plastic packaging materials, which are closely linked to crude oil prices, have also become more expensive. The government has raised fuel prices by nearly Rs 8 over the past two weeks.

Comparison of Export and Domestic Market Prices

For Tamil Nadu's poultry industry, the immediate challenge is therefore two-fold: weakening export demand from the Gulf and rising production costs at home. India's annual egg production is estimated at 149.11 billion eggs, of which roughly 95 percent to 98 percent is consumed domestically. However, redirecting export-oriented supply into the domestic market would likely come at the cost of lower margins for producers.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline