The United States’ threat that it will further escalate the tariffs on Indian rice that have been creeping up over the past six months hasn’t put exporters in a fluster. Traders said the tariff hike is not a “major concern” as the US market is the least price-elastic, with its size being very small compared to India’s total shipments of the grain. Besides, market diversification is easy for Indian traders, as aromatic rice produced in the country is globally competitive, and enjoys a committed consumer base across many countries.
Prem Garg, president, Rice Exporter Federation said exports of basmati rice to the US account for less than 3% of the country’s 6 million tonne (MT) annual shipments of the aromatic variety. India’s annual rice exports to the US , which includes both basmati and non-basmati varieties, is around 21 million tonnes (MT), or less than 1% of overall overseas shipments.
GTRI on the impact of new duties
“New duties would scarcely dent Indian exporters, who have strong markets elsewhere, but would make rice costlier for American households,” GTRI, a Delhi-based trade think tank said.
Trump’s remarks come amid discussions in Washington on levying additional duties on Indian rice, which already attracts a 50% tariff. Including some other levies, the tariffs are as high as 57%.
The duty, which began at 10% six months ago, rose to 25% and then to 50% over the last three months, but demand has remained largely intact.
Trump’s threat to impose new tariffs on Indian rice was announced alongside a US farm relief package on Monday.
Volume of rice trade
India exported $392 million worth of rice to the US in 2024-25. In terms of value, 86% of these shipments are premium basmati. Despite the US tariff, India’s rice exports—both basmati and non-basmati—rose 5.51% to $6.51 billion in the first seven months of FY26. In FY25, rice exports hit a record $12.47 billion, up over 20% from 2023-24.
Suraj Agarwal, CEO at Ricevilla Group said Indian basmati and premium non-basmati varieties are essential staples for Asian and Middle Eastern consumers.
However, some exporters raised concern. “When a major market like the USsignals strict trade barriers, it naturally shakes confidence in the supply chain. Exporters who have built stable relationships fear sudden losses, and farmers worry about a decline in demand for premium basmati,” Ranjit Singh Jossan, vice president, the basmati rice millers and exporters association, Punjab, told FE. Jossan said at a time when global trade needs stability, such unpredictable announcements create pressure on both sides.
Trump said India should not be ‘dumping’ its rice into America, adding that he would ‘take care’ of the situation’ and that tariffs could ‘easily resolve the problem’.
India has been the world’s largest rice exporter for a decade, commanding over 40% of the global grain trade.
India, ships rice to over 150 countries. While the Gulf countries especially Iran, United Arab Emirates and Saudi Arabia remain key markets for basmati, African nations have emerged as major buyers.