According to trade think tank GTRI, India exported $392 million worth of rice to the US in FY2025, accounting for just 3% of its worldwide rice exports. These consignments already attract an effective duty of about 53%, and 86% of the shipments comprise premium basmati rice. Any additional tariffs, the group noted, would do little to dent Indian exporters, who have well-established markets elsewhere, but would make rice more expensive for American consumers.
Much of the nearly 6 million tonnes exported to the US caters to Indian-origin households or Indians living in the country on visas, for whom basmati has few substitutes. Pakistan is the only credible alternative source of basmati, but its export volumes are significantly smaller. In the broader export basket, India’s dominant play remains in non-basmati rice.
Tariff rhetoric amid trade negotiations
Trump’s latest comments come just as a US delegation arrives in New Delhi for discussions on the long-pending bilateral trade agreement, with meetings scheduled for Wednesday and Thursday. The visit was unexpected, as Indian officials had previously indicated that most issues were close to resolution and the final round of talks was imminent. News of the delegation’s arrival also preceded Russian President Vladimir Putin’s visit to India.
Despite Trump’s claim that India is “dumping” rice in the US, experts point out that the allegation is unfounded. India’s rice shipments neither distort the American market nor receive subsidies that could trigger trade-remedy action. The tariff threat is therefore widely viewed as a negotiating tactic as the two sides attempt to close the first phase of a trade package.
Sticking points in the trade deal
Negotiations, launched in February, were initially expected to conclude by September–October. However, progress stalled after New Delhi declined Washington’s demands to lower duties on food items and genetically modified crops. In response, the US imposed 25% reciprocal tariffs and an additional 25% secondary tariff, citing India’s purchase of Russian oil and defence equipment.
In the initial phase of the agreement—targeted for completion by the end of the month—India is pushing for the removal of these secondary tariffs and is also seeking concessions on the reciprocal duties.At the same event where he targeted India, Trump also threatened steep agricultural tariffs on Canada and several other countries, further signalling a hardline stance on farm imports as negotiations continue.