Trump Warns India of New Tariffs Over Rice Dumping Claims. What Does the Data Reveal?
Washington D.C. – President Donald Trump has recently warned India against "dumping" cheap rice into the American market, suggesting potential new tariffs to protect U.S. farmers. The President's remarks, made during a White House roundtable, have raised concerns about escalating trade tensions between the two nations.
Trump's accusations stem from complaints by U.S. rice farmers who claim that subsidized imports from countries like India, Vietnam, and Thailand are undercutting domestic producers and depressing prices. Speaking at the White House, Trump directly challenged Treasury Secretary Scott Bessent on perceived exemptions for Indian rice amid broader tariff hikes. He questioned why India was "allowed to do that" and whether they had an exemption on rice tariffs. Bessent responded that they were still working on a trade deal with India, to which Trump retorted, "They shouldn't be dumping...They can't do that".
To assess the validity of these claims, it's crucial to examine the data on rice imports and exports between the two countries. In 2023, the United States imported $1.42 billion worth of rice, with Thailand being the largest supplier at $733.68 million, followed by India at $378.52 million. In 2024, the U.S. imported $1.62 billion of rice, with Thailand at $883.88 million and India at $422.50 million. While India is a significant exporter of rice to the U.S., it is not the largest. The U.S. also imports rice from China, Pakistan and Vietnam.
India is the world's largest rice exporter, accounting for 32.5% of global rice exports in 2023. In 2023, India exported $11 billion worth of rice, with Saudi Arabia, Iran, and Iraq being the top destinations. In 2024, India's rice exports reached $11.65 billion. According to Volza's India Export data, India leads the world in Indian Rice exports with 165,965 shipments.
The U.S. rice imports have been increasing for more than 30 years, accounting for over 25% of the domestic market by 2022/23. A significant portion of these imports consists of aromatic varieties from Asia, such as jasmine from Thailand and basmati from India and Pakistan.
The potential impact of new tariffs on Indian rice could be significant. KRBL and LT Foods are examples of Indian rice exporters that could face trouble. A 50% tariff has already been imposed on Indian goods by the U.S. in August over trade barriers and India's purchase of Russian oil. However, the President of the Indian Rice Exporters Federation (IREF) stated that India still maintains a pricing advantage over competitors like Vietnam and Pakistan.
The debate over rice dumping is not new. Historically, the U.S. has raised concerns about other countries selling products below production costs to gain market share. India, however, has argued that its efficiency comes from climate advantages. With a U.S. delegation scheduled to visit India this week, the discussions could be critical for India, especially given that it is one of the few countries that is yet to sign a trade deal with the Trump administration.
