New Delhi, Aug 14 (UNI) The recent increase of 25% tariffs by the United States on Indian rice has forced Indian exporters to quickly adapt and renegotiate prices with American buyers.
This is likely to raise food prices for consumers in the US, said Dev Garg, Vice President of the Indian Rice Exporters Federation (IREF) and Director of Shri Lal Mahal Group. The US move has also prompted the Indian exporters to explore other feasible markets.
Dev Garg said, “Indian exporters have already begun renegotiating prices with USA-based buyers, which will inevitably lead to increased prices. History teaches us that sudden and substantial tariffs, as seen in countries like Nigeria and Kenya, force domestic populations to accept higher costs for imported goods without shifting their food habits.
“This results in sustained food inflation in the importing nation. Once tariffs are reduced, exporting industries can capitalise on the elevated price acceptance to command higher margins in the future.”
The new tariffs have pushed the total tax on Indian rice to 50%, up from the previous 10%. Despite this challenge, Garg sees an opportunity for Indian exporters to explore new markets. He pointed out a recent agreement with the Philippines, where Indian rice exports are expected to grow as the country seeks to reduce dependence on China.
This move follows Prime Minister Narendra Modi’s efforts to strengthen ties with the Philippines through a strategic partnership focused on trade and cooperation.
Industry leaders remain hopeful that diplomatic talks will resolve the tariff issue soon. Garg added, “Even if tariffs continue, the extra costs will mostly be borne by US consumers. Indian exporters are also looking at other global markets to reduce dependence on the US.”
In fact, although global rice policies have historically been shaped by countries like Thailand and the USA—despite their smaller trade contributions—India is taking proactive steps to assert its leadership. The impact of the US president’s announcement of a tariff hike on Indian products, including rice, particularly basmati rice, will also be discussed threadbare at a two-day Bharat International Rice Conference (BIRC 2025) in October being organised by the IREF here.
It will also showcase India’s diverse rice ecosystem, innovations, policies, and trade opportunities, while facilitating knowledge exchange, networking, and business growth, said Dr. Prem Garg, President of IREF.
The recent imposition of tariffs by the US has escalated the effective rate on Indian rice to 50%, significantly higher than the initial 10% before the start of the tariff situation, said the trade body.
