Trump threatens to hike tariff, Indian rice market couldn't care less

US President Donald Trump has opened a new front in his trade rhetoric, warning that he is ready to impose further tariffs on Indian rice if he believes India is “dumping” its product into the American market.

The warning came during a White House roundtable with farming representatives and cabinet officials, where Trump also unveiled a $12 billion federal aid package for US farmers. India already faces about a 50% tariff on goods entering the US — among the highest rates imposed on any major trading partner.

Trump pressed Treasury Secretary Scott Bessent about India’s rice exports, asking, “They have to pay tariffs. Do they have an exemption on rice?” When told the bilateral trade deal remained unresolved, he shot back: “But they shouldn’t be dumping. I mean, I heard that. They can’t do that.”

The exchange prompted a brief discussion about an ongoing WTO dispute with India, setting off speculation about whether Trump intends to escalate trade measures.

Expert view on tariff threat, political motive behind warning

Trade analysts argue the warning has more to do with domestic political messaging than economic logic.
According to Ajay Srivastava of the Global Trade Research Initiative (GTRI), India exported only $392 million of rice to the US in the last financial year — about 3% of its global rice shipments. Most of it is premium basmati that already attracts tariffs of roughly 53%.

GTRI notes that any additional duties would affect American buyers far more than Indian exporters, who have strong markets in the Gulf, Europe, sub-Saharan Africa and Southeast Asia. Trump, during the same meeting, also floated high tariffs on agricultural imports from Canada and other countries, reinforcing the domestic intent of his messaging.

“India should read this as election-season messaging to US farmers, not a serious policy shift,” GTRI concludes, urging New Delhi to avoid offering concessions in response to a threat that “hurts US consumers more than Indian producers”.

Indian rice industry counters dumping claim

The Indian Rice Exporters Federation (IREF) issued a detailed clarification after Trump’s comments, underlining that Indian rice remains competitive, diversified and driven by direct consumer demand rather than market distortion.

“Indian rice export industry is resilient and globally competitive,” said Dev Garg, vice president of the IREF. The US is India’s fourth-largest market for basmati, with exports worth $337.10 million and 274,213 tonnes shipped last year. Non-basmati exports were a modest $54.64 million, making the US only the 24th-largest market in that category.

The IREF stressed that Indian rice caters primarily to the Gulf and subcontinent diaspora in the US, whose demand continues to rise. Key dishes such as biryani require long-grain aromatic basmati that US-grown rice cannot substitute.

“US-grown varieties generally do not meet the requirements of traditional dishes from the Gulf and South Asian regions,” the Federation said.

Before the recent tariff revision, Indian rice faced a 10% duty in the American market. The increase to 50% has pushed up retail prices for American buyers, but exporters say their realisations have stayed broadly steady.

“Most of the tariff burden has been passed on to US consumers,” the IREF noted, pointing to higher retail prices while Indian farmers and exporters continue to receive stable returns.

Indian exporters say orders from US importers are pre-arranged and continue without disruption, reinforcing their belief that Trump’s warning is more symbolic than strategic.