India set to surpass China as world’s largest rice producer, raising concerns over subsidized production.

Forrest Laws

After years of subsidizing its rice farmers by paying for crop inputs and setting minimum support prices, India is about to surpass China as the world’s largest rice producer.

USDA’s World Agricultural Outlook Board is forecasting that India will harvest a record 147 million metric tons of rice in the 2024-25 marketing year based on the Indian government’s Second Advanced Estimate and expected summer crop production.

“This is the ninth consecutive year of higher rice production for India and is the first time India surpassed China in rice production, making India the leading global rice producer for 2024-25,” the WAOB said in its April Supply and Demand Estimates report.

It said global 2024-25 rice trade is expected to rise 2.2 million tons to a record 60.6 million “mostly on larger exports for India, which are increased to a record 24.5 million tons.” This is occurring despite India placing restrictions on its rice exports due to weather problems from 2023 until the fall of 2024.

Indian subsidies

Rice industry analysts say India’s subsidies help cover the cost of fertilizer, irrigation wells and electricity, while its minimum support price or MSP provides a guaranteed price for farmers’ rice at harvest.

If the U.S. government provided fertilizer to U.S. rice farmers, it would eliminate one of the largest expense categories for growers. According to crop budgets prepared by the University of Arkansas, rice growers could spend from $73 to $131 an acre on fertilizers in 2025.

In a report entitled “Rice: Global Competitiveness and Impacts on Trade and the U.S. Industry, the U.S. International Trade Commission said that India has increased its rice area by 8.4 million acres over the last six years. That’s almost three U.S. rice crops in a normal production year.

USDA’s Foreign Agriculture Service estimates that a record 50 million hectares of rice (124 million acres) will be harvested in India in the 2024-25 marketing year as a result of India’s expansion of it minimum support price program into areas of the country that were not previously significant rice producers.

New trade agreement

The Trump administration is currently negotiating a new trade agreement with India, which presents an opportunity for the U.S. Trade Representative to seek a reduction in India’s price support policies, according to the USA Rice Federation.

“Given the announcement of the U.S. pursuing a trade agreement, we are doubling down on our work with the Office of the U.S. Trade Representative to ensure that India’s most egregious policies and practices related to rice and their impacts on the world market do not go unaddressed,” said Peter Bachman, president and CEO of USA Rice.

“We have long called on the U.S. government to intervene and stop India from its market manipulative practices. The recent USITC report and the FAS estimates are clear indicators India will not stop its practices on its own.”

Bachman said India has been ignoring the World Trade Organization’s rules against unfair trade subsidies for years, and, as recently as the WTO Ministerial Conference in February, has claimed it is exempt from those provisions.

“U.S. rice farmers and exporters along with nearly every other rice-producing country is suffering at the hands of these artificially low prices set by India with no end in sight,” said Bachman.

Prices rose

World rice prices rose during the months India kept most of its rice off the export markets after a delay in its monsoon rains in 2023. But prices throughout Asia began dropping last fall after India’s rice stocks increased to 29.7 million metric tons after the 2024 crop proved to be better than expected, and its exports resumed.

Rice prices in Thailand are now “steady” at $410 per metric ton and in Vietnam at $400 per metric ton as they try to compete with India’s prices at $385 per metric ton, according to the U.S. Rice Producers Association’s weekly newsletter. U.S. long-grain, milled rice prices are being quoted at $780 per metric ton.

“Prices in Asia are still bouncing along the bottom, which after four weeks, is considered a good thing,” the USRPA newsletter said. “It would indicate a bottom has been established and the market has adjusted by systematically removing the “unknowns” that accompany a drop. These low prices are a result of oversupply, not of the tariffs.”

In its new National Trade Estimate Report released in March. the U.S. Trade Representative said India and China have engaged in longstanding trade-distorting domestic support programs. USA Rice encouraged the USTR to take action on those with the World Trade Organization.

USA Rice had submitted comments last October that listed trade-distorting barriers not just in India but in a number of other countries. It said the USTR, USDA and the Commerce, State and Treasury Departments all review industry submissions to the NTE and contribute to the report.

“We estimate that if all of our 2025 outlined trade barriers across all 14 markets we referenced were resolved, in time, it could result in nearly $500 million in additional export sales of U.S. rice,” said Karah Janevicius, USA Rice director of international trade policy.

“Not only that, we further estimate that if India’s egregious rice-related policies and practices were eliminated, U.S. rice exports could increase by a minimum of $54 million annually.”

Published Date: May 9, 2025