(LONDON) — The Trump administration’s tariffs on Indian goods, initially 25% and then additional 25%, “due to India’s direct or indirect importation of Russian Federation oil,” is expected to make Indian basmati rice significantly more expensive for American consumers.
Basmati is an aromatic rice variety grown mostly in the Punjab region in northern India and is popular for its long grain, fluffy texture and distinct smell. This premium variety is sold for twice the price of other varieties meaning, even with limited quantity, basmati is considered a high value export.
India dominates the global market, providing the world with 65% of its basmati supply. Most of the rest comes from Pakistan.
The Indian price of exporting Indian rice is expected to rise sharply due to U.S. President Donald Trump’s tariffs on India, and the consequences for India could be extreme due to the stark tariff differential when compared to Pakistan.
While India faces a 50% duty, Pakistan has only a 19% tariff.
“We definitely see this [tariffs] as a positive thing,” Mudassar Ahmed, of Rice Partners, a Pakistani agricultural cooperative, to ABC News.
“The 50% tariff on Indian rice will effectively price it out of the U.S. market,” Malik Faisal Jahangir, chairman of the Rice Exporters Association of Pakistan, told Arab News.
Meanwhile, the northern state of Punjab in India, which shares borders with Pakistan’s Punjab province, has been experiencing the worst flooding since 1988.
Arvind Shukla, a journalist from local media outlet NewsPolti, told ABC News that the devastation from the floods has been widespread and that most of the districts that grow basmati have been severely impacted.
The floods submerged more than 150,000 hectares of farmland — an estimated 10% of potential output, the Indian Rice Exporters’ Federation (IREF) spokesperson told ABC News.
Farmers in Punjab have an average landholding of 8.95 acres per farmer, significantly more than the national average of 1.08, according to the Government’s Agriculture Census, and farming is more mechanized and resource-intensive, with farmers often investing in costly equipment financed through high-interest loans, leaving them among the most debt-burdened in the country.
Any disruption in crop yields, particularly of high value crops like basmati, makes them vulnerable to significant debt and potential default.
Punjab province in Pakistan has also flooded, with the region producing 90% of the country’s Basmati rice. More than 1,000 people have died in the floods since August 2025, as per Pakistan’s National Disaster Management Authority.
Officials estimate that 30 to 35% of their basmati output may have been impacted, according to the early estimates of Rice Partners Pvt Ltd., with the overall basmati damage may being up to 10% or 15%.
Pakistan exported approximately 772,725 tons of basmati rice in the last fiscal year, earning $876.9 million, an increase from 595,120 tons when compared to the year before, as reported by the Pakistan Bureau of Statistics.
India, however, in the last fiscal year exported 234,467 metric tons of basmati rice which is valued at $300 million to the U.S. alone, as per the Indian Agricultural and Processed Food Products Export Development Authority.
The U.S. rice import market has grown from 7% of the domestic market in 1993-94 to over 25% in 2022-23, according to the U.S. Department of Agriculture (USDA), and the aromatic variety accounts for 60% of U.S. imports, with basmati from India and Pakistan as well as jasmine from Thailand.
The Basmati rice market is expected to grow to approximately $27 billion by 2032, as per Market Research Future’s Global Basmati Rice Market report.
“Pakistan can provide some basmati because of tariff difference, but can’t compensate for India’s quantity,” Vinod Kumar Kaul, executive director of India Rice Exporters Federation (IREF), said to ABC News.
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