Disputes have already arisen between the exporters and the buyers with the new US tariff order to be implemented from April 9.

Harpreet Bajwa

CHANDIGARH: The 26 percent tariff imposed by US President Donald Trump will directly hit the basmati rice export from India.

It is likely to affect Punjab, the highest producer of Basmati rice in the country, with a total of 40 per cent production followed by Haryana and other states.

The tariff could have a cascading effect on both the exporters and farmers in the State.

In the 2023-24 fiscal, 3.08 lakh metric tonnes of basmati rice was exported to the US. A total of 59.42 LMT of basmati rice was exported from the country, and 3.15 LMT was exported to US in 2023-24.

Now, many shipments headed to the US face uncertainty following the new duties imposed.

Out of the total exports, basmati rice is mainly exported to five countries: 7 LMT to Iran, 11 LMT to Saudi Arabia, 8 LMT to Iraq, 3 LMT to Yaman and 3 LMT to US and remaining to other countries.

Ranjit Singh Jossan, Vice-President of the Basmati Rice Miller and Exporter Association, said that disputes have already arisen between the exporters and the buyers with the new US tariff order to be implemented from April 9.

He also said the consignments that the exporters have sent to the US, would take a month to reach there.

“The buyers want us (sellers) to bear the 26 per cent import duty (300 US dollars per tonne) as the market in the US could not absorb this overnight increase. The importers buy basmati from India at an average price of 1,100 US dollars per tonne. We are being forced to redirect shipments to other countries at lower prices as ongoing deals in the US are now on put on hold and we are losing our market share,’’ he said.

“The value of our currency is Rs 85.50 per US dollar and that of Pakistani rupee is Rs 280 per US Dollar. As the Pakistani currency is already devalued against the US dollar, the exporters of the neighboring country will directly benefit,” he added.

“Also, Pakistani farmers have small land holdings and hence do not use pesticides. Their crop is pesticide free, which is not the case with us. The importers from the US might shift to Pakistan as it is an cheaper alternative,’’ he said.

The issue of ‘pesticide residue’ has also been haunting the basmati exporters with several countries, including the EU, USA and others who had lowered MRL’s (Minimum Residue Level), curtailing exports from Punjab.

“Out of the total Basmati rice export, over 50 per cent share belongs to business houses of the country, and they are related to Punjab. They procure the crop from the farmers of the state, and thus directly hit farmers, besides exports,” he said.

He added that in the last four years, 50 per cent of crushing is done in Punjab besides Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh. “The number of units doubled in Punjab from 80 units previously, to 210 units now,” he noted.

He warned that reduced US demand could force exporters to slash procurement prices

Since 1991, basmati has shifted from a local delicacy to a cash crop, with exports surging 37 times its previous total value.

Now, basmati rice is grown in 6.71 lakh hectares in the state.

Between 2013 and 2024, basmati accounted for one third of India’s total rice exports and brought in more than 50 per cent of India’s total export revenue from rice.

Published Date: April 6, 2025