The US is likely to impose additional tariffs on rice imports from India in the next few weeks, but their impact is expected to be minimal on India’s global rice trade, experts have said.
The US is targeting Indian rice imports as it is under pressure to increase tariffs. This is not because imports into the US are high, but India’s competitive pricing in the global market is affecting Washington’s rice exports.
Rice industry experts said there are two reasons behind this move. One, US rice is priced higher than the cereal from Asian countries. As a result, it is not able to expand its exports of 2.6 million tonnes annually beyond South America.
Two, low global prices have resulted in returns dropping for the US rice farmers, thus forcing the Donald Trump administration to target Asian rice, particularly India.
US farmers are reporting losses in cultivating rice. Under the US price loss coverage programme, rice farmers received $70 an acre subsidy last year. Since growers’ losses are likely to be higher this year due to prices ruling at multi-year lows, the subsidy may increase to $170.
As a result, the US may have to spend $1.2 billion on rice farmers. “So, the US is targeting 1.35 lakh Indian rice growers to help its 5,600 wealthy rice growers. Additional tariffs could go to meet the extra expenditure on the subsidy,” said New Delhi-based trade analyst S Chandrasekaran.
A rice lobby is trying to get more than the $125,000 per farmer subsidy, with the US set to come up with a new farm bill to support farmers.
Meanwhile, industry associations such as the All India Rice Exporters Association and Indian Rice Exporters Federation said the US move will have little impact as the US is the 24th largest market for Indian non-basmati rice and the fourth biggest buyer of basmati rice.
‘Tacit’ narrative
The West seems to be creating a “tacit” narrative against Asian rice-producing countries, according to trade analyst S Chandrsekaran.
“Last week, the European Union planned a safeguard mechanism to curb rice imports from Asia. Now, we have the US saying it will impose additional duties fo dumping rice,” he said.
A rice industry source said the US has been unable to find buyers in Africa and other markets, where India, the top global exporter, holds sway.
“African countries cannot afford high-priced US rice. The PL-420 programme, under which rice was exported by the US to some economically weaker countries, is not available now. So, India and other Asian countries are being targeted,” said the source, who did not wish to be identified.
Chandrasekaran said input costs for cultivating paddy are increasing in the US, and they need more support. “That’s why US President Donald Trump is targeting India,” he said.
Fresh tariffs
On Monday, rice farmers complained to Trump that Indian farmers were dumping cheaper grains in the US. The US President said he could consider fresh tariffs on Indian rice imports.
The industry source wondered if the US was trying to put pressure on India ahead of the talks to be held in New Delhi this week. “The US move will also have to be viewed from strategic security architechture,” the source said.
Reacting to Trump’s threat, the All India Rice Exporters Association (AIREA) President Satish Goel said if the US imposes more tariffs on Indian rice, it will be the US consumer who will have to pay for it.
“More tariffs will not have any impact on the Indian farmer nor the exporter,” he said.
India exported around 2.7 lakh tonnes of basmati to the US, out of the total shipments of 60.65 lakh tonnes during 2024-25. “The US accounts for around 4.5 per cent of our total basmati exports. ,” said Goel.
This fiscal year, exports are higher than last year, and over 6 million tonnes of basmati rice would be shipped out, he said. Per APEDA data, India’s basmati exports during April-September this year stood at 31.68 lakh tonnes valued at over $2.76 billion. In the same period last year, basmati exports were 27.20 lakh tonnes valued at $2.86 billion.
The Indian Rice Exporters Federation (IREF) said Indian rice in the US is predominantly consumed by ethnic communities of the Gulf and the sub-continent. Demand continues to expand steadily. “This growth is closely linked to the rising popularity of Indian cuisine—particularly dishes such as biryani, where Basmati rice is an essential ingredient and not easily replaceable,” Dev Garg, Vice President, Indian Rice Exporters Federation.
Exports to the US are demand-driven, with most shipments executed against advance purchase orders from US-based importers.
“Importantly, rice grown in the US is not a like-for-like substitute for Indian rice. Indian basmati has a distinct aroma, elongation, texture, and flavour profile, and US-grown varieties generally do not meet the requirements of traditional dishes from the Gulf and South Asian regions,” he said.
Before the recent tariff increase, Indian rice faced a tariff of 10 per cent in the US market. With the imposition of a 50 per cent tariff, the duty has risen by 40 percentage points. Despite this sharp hike, exports have continued, reflecting the product’s essential nature in the consumer basket.
Evidence from retail markets indicates that most of the tariff burden has been passed on to US consumers, as reflected in higher retail pack prices, while export realisations for Indian farmers and exporters remain broadly stable.
“The Indian rice export industry is resilient and globally competitive,” said the IREF Vice President.
While the US is an important destination, India’s rice exports are well-diversified across global markets. The Federation, in close coordination with the Government of India, continues to deepen existing trade partnerships and open new markets for Indian rice,” he said.
(With inputs from Vishwanath Kulkarni, Bengaluru)
Published on December 9, 2025
