- Lower duties narrow price gap with Thailand, Pakistan
- US demand remains resilient despite earlier duty shock
India’s rice exporters are set to regain price competitiveness in the United States after a bilateral trade agreement cut US import duties on Indian rice, restoring tariff parity with key Asian competitors and improving India’s landed-cost positioning in one of its most stable overseas markets.
The Indian Rice Exporters Federation (IREF) said the reduction in US tariffs from 50% to 18% would materially ease the cost burden on Indian shipments and align duty levels with those faced by exporters from Thailand and Pakistan, where tariffs currently stand near 19%.
The move follows an announcement by US President Donald Trump and Indian Prime Minister Narendra Modi on 2 February, under which the US reduced its reciprocal tariff on India to 18% from 25% and removed an additional 25% punitive levy linked to India’s purchases of Russian crude oil.
Tariff parity improves landed price dynamics
The tariff reset is expected to directly improve landed prices for Indian rice, supporting stronger offtake across both basmati and non-basmati categories. Indian exporters had been operating at a disadvantage since duties were raised sharply, compressing margins and limiting pricing flexibility relative to Southeast Asian suppliers.
“Tariff parity with competing origins restores India’s ability to compete on price without compromising quality,” said Prem Garg, National President of IREF. He added that the timing was favorable, as India enters the new marketing season with record rice output estimated at around 149 million tonnes and ample exportable surplus.
With logistics efficiencies, scale advantages, and a diversified varietal basket, India is expected to defend and potentially expand its share of the US rice market, particularly in ethnic and value-driven retail segments.
Demand resilience despite earlier duty shock
Indian rice shipments to the US continued to rise even after duties were increased from 10% to 50%, underscoring the essential role Indian rice plays in US consumption patterns. This resilience reflects strong buyer dependence on Indian supply, especially for basmati and specialty non-basmati grades that face limited substitution.
“Shipment trends clearly indicate that Indian rice remains indispensable for US importers and consumers, even under sharply higher duties,” Garg said, adding that the current tariff correction is likely to translate quickly into higher volumes and improved price realization.
Outlook supported by stable trade framework
The Federation also addressed market concerns around the potential for secondary trade disruptions linked to India’s commercial ties with Iran. Based on current policy visibility, IREF said it does not expect additional trade barriers and anticipates continuity in export flows.
Dev Garg, Vice President of IREF, said the federation would continue engaging with exporters and policymakers to ensure readiness for any procedural changes. “Our focus remains on supporting stable, rules-based trade that sustains supply chains and protects end-consumer interests,” he said.
With global rice markets already under pressure from abundant supply and intense competition, the tariff reset provides Indian exporters a timely opportunity to improve market access, reinforce pricing power, and consolidate their position in the US market.
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