US tariff threat on Indian rice 'not a major concern', say exporters

Indian rice exporters downplayed the US warning of additional tariffs on Indian rice, saying it is "not a major concern" and unlikely to affect the industry in any way. Exporters said demand remains strong and India's shipments to the American market are relatively small.

Prem Garg, president of the India Rice Exporter Federation, noted that basmati exports to the US make up less than 3 per cent of India's annual six million tonnes of basmati shipments. Overall, the US accounts for below 1 per cent of India's total rice exports, which stand at around 21 million tonnes, he added.

"The US market is not large in our overall export basket and other new markets are also growing," he said. Garg reiterated that allegations by US officials of India "dumping" rice are "completely wrong", noting that the US imports only about 2.7 lakh tonne of Indian rice annually, a small volume compared to India's global footprint.

His remarks come amid discussions in Washington on levying additional duties on Indian rice, which already attracts a 50 per cent tariff. The duty, which began at 10 per cent six months ago before rising to 25 per cent and then 50 per cent over the last three months, has had "no demand impact", Garg said. "Exports in November are similar to last year," he added.

Industry players said American consumers will primarily bear any further tariff hike.

Ricevilla Group CEO Suraj Agarwal said Indian basmati and premium non-basmati varieties exported to the US are essential staples for Asian and Middle Eastern communities. "These are necessity items, not luxury goods. Demand impact will be negligible. Only US consumers will bear the brunt of any additional tariff," he said.

India, which supplies 40 per cent of global rice exports and ships to 172 countries, continues to see robust demand. While Gulf countries remain key markets for basmati, African nations have emerged as fast-growing buyers.

Benin, for instance, imported over 60,000 tonnes of basmati last year- a new market expanding "very fast", Garg said. Russia has also begun purchasing basmati, moving beyond its traditional focus on non-basmati varieties. Even major rice-producing countries like Brazil and Thailand are importing Indian basmati, he stated.

Garg said India has overtaken China to become the world's largest rice producer, and domestic output is likely to grow by 4-5 per cent next year as farmers receive better prices.

(With PTI inputs)