India’s rice export sector is navigating a new wave of global trade dynamics as the United States (US) imposes a 25% tariff on Indian rice imports, effective from August 1, 2025. Despite the move, the Indian rice industry is showing a strong front, with leading export associations and industry executives expressing resilience and optimism.

According to the Indian Rice Exporters Federation (IREF), the new duty is seen as a temporary roadblock rather than a long-term threat. This confidence stems from the fact that the US accounts for less than 5% of India’s global basmati rice exports. Specifically, India shipped about 2.34 lakh tonnes of rice to the US in FY24, out of a total of 52.4 lakh tonnes globally. The limited exposure to the US market softens the blow of the tariff significantly.

West Asia continues to remain India’s primary rice export destination, absorbing a substantial portion of shipments. This reinforces the market diversification India has strategically built over the years, with strong demand coming from countries in the Gulf region, Southeast Asia, and parts of Europe. The imposition of tariffs by the US, therefore, may shift the strategic focus of Indian exporters further toward these regions.

Mr. Prem Garg, the National President of IREF, highlighted that while the tariff poses a challenge, it is not insurmountable. He emphasized the importance of strategic planning, product diversification, and targeted marketing in newer and existing markets. According to him, the industry is well-prepared to pivot where necessary, especially since this is not the first time Indian rice exporters have had to adjust to shifting international trade policies.

In support of this stance, Mr. Suraj Agarwal, CEO of Ricevilla Group, pointed out that India still holds a competitive edge, even with the 25% US duty. While the tariff might marginally impact pricing, other major rice-exporting nations like China (34%), Vietnam (46%), and Thailand (36%) are facing even steeper tariff rates from the US. This comparative advantage helps Indian exporters maintain their foothold, particularly in price-sensitive markets.

The Indian Rice Exporters Federation (IREF), representing over 7,500 stakeholders, is now working in coordination with government agencies and international trade bodies to address the issue comprehensively. The Federation aims to ensure that supply chains remain uninterrupted, pricing remains stable, and that exporters have access to newer markets if the US demand weakens.

The imposition of the 25% duty also highlights broader concerns about geopolitical tensions and the increasing use of tariffs as trade instruments in the global agricultural commodities market. In this case, India's relatively diverse rice export strategy has helped shield it from significant disruption. Experts note that India’s government policies, like subsidies for exporters, investment in port infrastructure, and export incentives under the Foreign Trade Policy, also play a role in maintaining India's competitive position globally.

While short-term logistical hurdles may arise, such as rerouting shipments and negotiating with new buyers, the Indian rice export community remains confident. The resilience of Indian agriculture exports, particularly in the basmati category, has been well-tested in the past through regulatory changes, weather impacts, and currency fluctuations.

Going forward, the IREF has indicated plans to host trade exhibitions, initiate buyer-seller meets, and strengthen export financing mechanisms with support from the Ministry of Commerce and Industry. These initiatives aim to solidify existing markets and penetrate emerging ones in Africa, Latin America, and Southeast Asia.

This situation also underlines the importance of developing a value-added product ecosystem. Exporters are increasingly looking to move beyond raw rice shipments and into ready-to-cook and packaged branded products, which command higher margins and face fewer trade barriers. Such initiatives could further reduce dependency on sensitive markets and offer a more resilient revenue model for the Indian rice sector.

In conclusion, while the 25% US tariff poses a fresh challenge, the Indian rice export industry, backed by institutional strength, market flexibility, and competitive pricing, is well-positioned to absorb the impact. With proactive measures from industry leaders and government coordination, India is expected not only to weather the storm but also explore new global opportunities that arise in a shifting trade landscape.

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