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India’s basmati rice exports to the US fell 13% to 78,000 tonnes in April–July 2024 from over 90,000 tonnes a year earlier, with sharper declines expected in August following tariff hikes from 25% to 50% after August 27. Pakistan, facing only 19% duty, stands to benefit. The US is among the highest-value markets for Indian basmati, with realisations near $1,230/tonne. Exporters are exploring China as an alternative market amid improving bilateral ties. Basmati remains a key agri-export, accounting for 30% of India’s rice exports. Saudi Arabia, Iraq, and Iran remain top buyers, while US import share faces erosion.

* Basmati exports to US dropped 13% in April–July 2024.

* US tariffs rising from 25% to 50% post-August 27.

* Pakistan gains advantage with only 19% US import duty.

* China emerging as alternative market amid better India–China relations.

* US remains one of the highest-value markets for basmati.

India’s basmati rice exports to the US have faced a setback, dropping 13% to 78,000 tonnes during April–July 2024 from over 90,000 tonnes in the same period last year. August figures are expected to show a steeper decline as the US administration increases import duties from 25% to 50% after August 27. This shift is set to give Pakistan, which faces only a 19% duty, a competitive edge in the American market.

The US has been a lucrative destination for Indian exporters, with realisations averaging $1,230 per tonne — higher than $1,025 from Saudi Arabia and $881 from Iran. Saudi Arabia remains the largest buyer, importing 1.17 million tonnes worth $1.12 billion, while Iraq and Iran together purchased 1.76 million tonnes worth $1.6 billion in FY 2024–25.

With the US market under pressure, exporters are eyeing China as a potential alternative. Imports from China rose to 5,834 tonnes in 2024–25 from 3,293 tonnes a year earlier, supported by improved bilateral ties, resumed air connectivity, and recent trade goodwill gestures.

Basmati rice, protected under Geographical Indications (GI) by both India and Pakistan, remains a major agri-export, contributing 30% to India’s total rice shipments of 6.07 million tonnes in 2024–25. However, with the higher US duty, some buyers may shift sourcing to Pakistan.

In conclusion, rising US tariffs threaten India’s high-value basmati exports, pushing exporters to diversify markets, with China offering potential but still far from matching US trade volumes.

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