US President Signals Stricter Trade Actions Against India

US President Donald Trump has once again raised concerns over Indian rice entering the American market, cautioning that additional tariffs could be imposed if India continues what he described as “dumping” practices. Trump asserted that he would “take care” of the situation and hinted that tariffs could “easily resolve the problem.” The warning comes even as Indian exports already face a steep 50% tariff—one of the highest levied by the US on any nation. The remarks surfaced during a White House roundtable featuring key farming representatives and senior officials, including Treasury Secretary Scott Bessent and Agriculture Secretary Brooke Rollins. At the event, Trump also unveiled a $12-billion federal assistance package for American farmers.

Trump’s Tariff Remarks: What Sparked the Warning?

Questions Raised Over India’s Trade Practices

During the meeting, Trump directly questioned Bessent about India’s rice exports, asking, “Why is India allowed to do that? They have to pay tariffs. Do they have an exemption on rice?” Upon hearing that no exemption exists and that trade negotiations are ongoing, Trump stressed that India “shouldn’t be dumping,” prompting further discussion about a World Trade Organization (WTO) case involving Indian rice.

What New Tariffs Could Mean for India

Experts Suggest Political Motive Over Economic Logic

Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), believes Trump’s threat appears rooted more in election-driven politics than in trade economics. He notes that India exported $392 million worth of rice to the US in FY2025—only 3% of India’s global rice exports—with most shipments already carrying a roughly 53% tariff. Notably, 86% of India’s rice exports to the US consist of premium basmati varieties. According to GTRI, additional tariffs would have minimal impact on Indian exporters, who enjoy broad global markets, but would push US retail prices higher, placing the burden on American consumers. Trump also hinted at steep tariffs on agricultural imports from Canada and other nations, reinforcing the political undertone of the message. GTRI advised India not to make concessions in response, describing the warning as “election-season messaging to US farmers” rather than a genuine shift in policy.

Indian Rice Industry Responds

Exporters Emphasize Market Strength and Consumer-Driven Demand

The Indian Rice Exporters Federation (IREF) issued a clarification shortly after Trump’s remarks, emphasizing that India’s rice sector remains “resilient and globally competitive.” Dev Garg, Vice President of IREF, highlighted that India’s rice exports are diverse, with the US being only one of many international markets. He noted that in FY 2024–2025, India exported $337.10 million worth of basmati rice—equivalent to 274,213.14 metric tonnes—to the US, making it the fourth-largest destination for basmati. During the same period, non-basmati rice exports to the US totalled $54.64 million and 61,341.54 MT, placing the US as the 24th-largest market for non-basmati rice. The federation underscored that the demand for Indian rice in the US is largely driven by ethnic Gulf and South Asian communities, where basmati rice is irreplaceable in popular dishes such as biryani. Exporters primarily supply pre-booked orders from US importers, reflecting consistent direct demand.

Why American Rice Isn’t a Substitute

Unique Qualities of Indian Basmati

IREF reiterated that US-grown rice does not match the characteristics of Indian basmati, which is prized for its aroma, length, texture, and flavour profile. For culinary traditions across the Gulf and South Asia, these qualities are non-negotiable, making Indian varieties essential.

Tariffs Hike: Who Bears the Cost?

Before the latest increase, Indian rice was subject to a 10% tariff in the US. This has now risen to 50%, yet Indian exports have continued uninterrupted. Market data shows that the higher tariff burden has largely been passed on to American consumers, visible in elevated retail prices, while Indian farmers and exporters have maintained stable revenue levels. IREF states that retail evidence consistently indicates US shoppers—not Indian producers—are absorbing the increased costs.

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Sorit Chaudhary

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