Trump's Tariff Threat On Indian Rice: US Move May Hit American Consumers In The Wallet - Here's Why

(MENAFN- Live Mint) The Indian Rice Exporters Federation (IREF) said the impact of higher Trump tariffs on Indian rice imports will likely be passed on to American consumers, given the essential role of the product in household consumption.

The federation also noted that most of the tariff burden has already been passed on to US consumers, citing evidence from retail markets. As a result of this tariff pressure, India will continue to deepen its trade partnerships with other countries and tap new markets for exporting rice.

“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,” the federation told ANI.

Is US planning to increase tariffs on Indian rice?

On Monday, 8 December, US President Donald Trump hinted that he might impose tariffs on Indian ric, as New Delhi and Washington continue their trade talks without any major breakthrough.

While speaking in a meeting at the White House, he expressed interest in introducing new tariffs on agricultural imports, particularly Indian rice and fertilisers from Canada, Mint reported.

However, experts claim that this fresh threat of imposing additional tariffs on Indian rice exports appears to be driven more by domestic political messaging than a major policy shift, ANI reported.

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During the same meeting, President Trump also unveiled a $12 billion fresh aid for US farmers amid complaints that cheaper imports were making it difficult for their goods to compete in the US markets.

The Global Trade Research Initiative (GTRI), an Indian think tank, said the new tariff threat, issued alongside the unveiling of a US farm relief package, appears to be election-season messaging aimed at American farmers.

“Trump threatens to impose high tariffs on Indian rice. But the threat is politics, not policy,” the think tank said.

How will the fresh duties impact Indian exporters if imposed?

The GTRI also noted that even if the Trump administration imposes fresh tariffs, the impact will be minimal on Indian exporters as there is strong demand for rice in other markets, giving India a wide range of options for exports.

However, higher tariffs would likely make rice costlier for American households that rely on Indian varieties.

According to data compiled by IREF, India exported Basmati rice worth $337.10 million, totalling 274,213.14 metric tonnes (MT) during the financial year 2024-2025, making the US the 4th largest market for Indian basmati.

In the same period, India exported non-basmati rice valued at $54.64 million, amounting to 61,341.54 MT, making the US the 24th largest market for non-basmati rice.

What does this mean for rice consumers in US?

The Federation explained that a majority of the Indian rice exports are bought and consumed by people of Gulf and South Asian regions. The demand continues to grow, especially for dishes such as biryani, where basmati rice is considered essential and not easily replaceable.

Additionally, Indian basmati rice cannot be substituted with rice grown in the US because of the variety's distinct aroma, flavour, texture, and elongation.

The statement added that before the latest tariff hike, Indian rice already faced a 10% tariff, which increased by 40 percentage points after a 50% tariff was imposed by Washington in August.

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Despite the sweeping duties, exports have not seen a major disruption, as most of the cost increase was passed on to the American consumers through higher retail prices, while farmers and exporters in India continued to receive stable returns.

The GTRI further advised India to view the tariff threat as an election-season rhetoric and avoid making concessions that could weaken its trade position, noting that such moves could harm US consumers more than Indian exporters.

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