Why in news?

US President Donald Trump recently alleged that India is “dumping” rice in the US and hurting American farmers, vowing to fix the issue with tariffs. However, trade data contradicts this claim.

The US is not a major rice producer and actually exports more rice than it imports. In 2024–25, US production was only 7.05 million tonnes—far below India’s 150 million tonnes—yet the US still exported 3 million tonnes while importing 1.6 million tonnes.

In value terms, the US imported $1.5 billion worth of rice in 2024, mainly from Thailand, while imports from India were much smaller. The data shows India’s rice exports to the US are limited, and the US is far from being flooded with Indian rice.

What’s in Today’s Article?

• India’s Dominance in Global Rice Exports
• U.S. Threatens Tariffs on Indian Rice
• US Rice Imports: Mostly Premium, Not Low-Value Dumping
• Impact of Potential New Tariffs on India’s Rice Exports

India’s Dominance in Global Rice Exports

• India remained the world’s leading rice exporter in 2024–25, shipping 198.65 lakh tonnes (19.86 million tonnes) of rice across multiple categories — basmati, parboiled, non-basmati white, broken and other varieties.
• In value terms, exports exceeded $12.95 billion, reinforcing India’s position as the top global supplier, controlling around 40% of international rice trade.
• Strong monsoons, competitive pricing and the removal of export restrictions on non-basmati rice boosted the sector.
• India produced 150 million tonnes of rice in 2024–25, accounting for 28% of global output, with yields increasing from 2.72 t/ha (2014–15) to 3.2 t/ha (2024–25) due to better seeds, agronomy and irrigation.
• India currently supplies rice to over 172 countries, and aims to expand exports to 26 additional markets, including the Philippines, Indonesia, the UK, and Mexico, according to APEDA.

U.S. Threatens Tariffs on Indian Rice

• Days before U.S. negotiators arrive in New Delhi, President Donald Trump suggested new tariffs on Indian rice, claiming India was “dumping” rice in the U.S.
• However, experts say the move appears aimed at pleasing U.S. farmers rather than reflecting genuine trade concerns.

US Rice Imports: Mostly Premium, Not Low-Value Dumping

• The US does not import cheap, low-value rice from India or Thailand. Instead, it buys premium aromatic varieties such as Thai Hom Mali, Jasmine, and Indian basmati—priced much higher than US-exported rice.
• These imported varieties cost between $690 and $1,125 per tonne, compared to $560–$675 per tonne for typical US export rice.
• Since the US exports more rice than it imports, and its imports consist mainly of high-value specialty rice, claims of India “dumping” cheap rice in the American market do not hold.

Impact of Potential New Tariffs on India’s Rice Exports

• India is the world’s biggest rice exporter, shipping 22.5–25 million tonnes annually. In comparison, the US is a very small buyer of Indian rice.
• US Share in Indian Exports Is Tiny
  • Basmati exports (2024–25):
    • Total: 60.65 lakh tonnes
    • To the US: 2.74 lakh tonnes (≈ 4.5%)
  • Non-basmati exports:
    • Total: 141.30 lakh tonnes
    • To the US: 0.61 lakh tonnes (≈ 0.4%)
  • This trend continues in the current fiscal year as well: the US takes only 1–2% of India’s rice shipments.
• Bigger Markets Lie Elsewhere
  • Basmati: West Asia dominates — Saudi Arabia, Iran, Iraq, UAE.
    • In the US, basmati sales are controlled by a few Indian companies like LT Foods, whose "Royal" brand holds 55% of the North American market.
  • Non-basmati: Africa is the main buyer — Benin, Togo, Côte d’Ivoire, Liberia, Senegal, etc.
    • The US is almost irrelevant for this category.
• Tariff Impact: Minimal to Negligible
  • Even if Donald Trump imposes new tariffs, the effect on India will be small because:
    • The US is not a major rice market for India.
    • Indian exporters are not dependent on the US for volumes or revenue.
    • Other export items (shrimps, jewellery, garments) would feel tariffs much more than rice.
  • Experts believe that the proposed tariff would backfire on the US as:
    • Tariffs would barely affect India, which has strong global markets. But they would raise rice prices for U.S. households, hurting consumers.
    • The threat looks like election-season messaging to American farmers, not a policy shift.