US tariff on Indian rice opens market for Pakistan

Published August 12, 2025
Indian exporters have warned that the cost of additional US tariffs risked making businesses ‘not viable’ after 50pc levies imposed on imports from India.—AFP
Indian exporters have warned that the cost of additional US tariffs risked making businesses ‘not viable’ after 50pc levies imposed on imports from India.—AFP

WASHINGTON: The 50 per cent tariff imposed by the Trump administration on Indian goods, including basmati rice, has reshaped trade flows in the United States, providing Pakistan an opportunity to expand its share in the American aromatic rice market.

Pakistan’s basmati rice exports have witnessed steady growth in recent years. According to the Rice Exporters Association of Pakistan (REAP), the country exported approximately 772,725 tonnes of basmati rice in FY24, generating $876.9m — up from 595,120 tonnes worth $650.4m in the previous fiscal year. The average export price per tonne also increased from $1,092.93 to $1,134.86.

Data from Volza’s Global Trade platform shows that between November 2023 and October 2024, the United States accounted for 24pc of Pakistan’s total basmati exports through 1,519 shipments. Italy and the United Kingdom followed with shares of 14pc (908 shipments) and 11pc (716 shipments), respectively.

Together, these three markets consumed nearly 49pc of Pakistan’s basmati rice exports. Pakistan currently exports basmati rice to over 110 countries, with other key destinations including Australia, Saudi Arabia, the UAE, Canada, the Netherlands, and Germany.

Basmati exports rose 35pc in FY24 to 772,725 tonnes, earning $876.9m

According to the US Department of Agriculture (USDA), rice imports in the US have grown steadily over the past three decades — from 7pc of the domestic market in 1993/94 to over 25pc by 2022/23. Over 60pc of these imports consist of aromatic varieties from Asia, mainly jasmine from Thailand and basmati from India and Pakistan.

While the US produces some aromatic rice domestically, these differ in quality and aroma from their Asian counterparts. The USDA projects continued growth in demand for aromatic rice imports in the coming years.

The tariff dispute emerged from US punitive measures targeting India’s trade and energy ties with Russia, resulting in broad tariffs on several Indian exports, including basmati rice, pharmaceuticals, and electronics. Although some sectors later received exemptions, basmati rice remained subject to the full 50pc tariff. In contrast, Pakistani basmati rice continues to face a lower tariff of 19pc, giving it a distinct pricing advantage in the US market.

Indian media reports suggest that the tariff hike could reduce India’s basmati exports to the US by 50-80pc, with prices climbing to nearly $1,800 per metric tonne. Pakistani basmati, by comparison, remains priced at around $1,450 per metric tonne, making it more competitive for US importers and retailers.

Retailers across the US are already reporting increased interest in Pakistani basmati rice. Khan Mohammed, a salesman at Super Halal grocery in Springfield, Virginia, noted: “Pakistani rice is already popular.

Published in Dawn, August 12th, 2025

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Growth to stability
Updated 29 Apr, 2026

Growth to stability

THE State Bank’s decision to raise its key policy rate by 100 basis points to 11.5pc signals a shift in priorities...
Constitutional order
29 Apr, 2026

Constitutional order

FOLLOWING the passage of the 26th and 27th Amendments, in 2024 and 2025 respectively, jurists and members of the...
Protecting childhood
29 Apr, 2026

Protecting childhood

AN important victory for child protection was secured on Monday with the Punjab Assembly’s passage of the Child...
Unlearnt lessons
Updated 28 Apr, 2026

Unlearnt lessons

THE US is undoubtedly the world’s top military and economic power at this time. Yet as the Iran quagmire has ...
Solar vision?
28 Apr, 2026

Solar vision?

THE recent imposition of certain regulatory requirements for small-scale solar systems, followed by the reversal of...
Breaking malaria’s grip
28 Apr, 2026

Breaking malaria’s grip

FOR the first time in decades, defeating malaria in our lifetime is possible, according to WHO. Yet in Pakistan,...