Donald Trump warns of tariffs on Indian rice – what’s the full picture?
The White House is once again in the spotlight regarding agricultural imports into the US. Following complaints from American farmer groups at an event held on December 8, 2025, Trump indicated that new tariffs might be imposed on rice from certain countries, including India.
What did Trump say?
- Trump clarified that American farmers have told him that cheap rice is being imported from countries like India, Vietnam, and Thailand, which is driving down rice prices in the US market and harming domestic farmers.
- He asked, “Why is India being allowed to do this? They will have to pay tariffs.”
- Trump warned that if India does not stop dumping such rice, “heavy duties” will be imposed, citing the protection of the economy and farmers’ interests as the rationale.
- Along with this announcement, Trump also launched a US$12 billion relief package for American farmers – intended for those affected by cheap imports.
Background: India-US Rice Trade
- By 2025, there was already tariff tension between India and the US. In April 2025, the US implemented “reciprocal tariffs,” imposing a duty of approximately 26% on rice imported from India.
- Then, from August 2025, the US imposed a 25% tariff on several items exported from India, including rice.
- The quantity of rice (basmati and non-basmati) exported from India to the US in 2024 was 234,000 tons. Thus, the US accounts for a very small portion of India’s total rice exports.
- Despite the previous tariffs, the Indian exporters’ organization stated that this was a “temporary obstacle” – and that Indian rice exports would not be affected in the long term.
Why the new tariff? US Farmers’ Discontent
- American farmers allege that cheap rice from India (and other countries) is being “dumped” into the US market—that is, prices are being driven down, undercutting the prices of local crops.
- They have told the government that their farming operations will become unprofitable if cheap imports are not stopped. Trump has taken this complaint seriously and has assured them of action in the farmers’ interest.
- This move is being seen, in a way, as a step towards protecting America’s agriculture and domestic market.
Impact on India-US Trade and Politics
- If the US imposes new, higher tariffs on rice, exports from India (especially non-basmati) could be affected—the US market is an important destination for Indian rice exporters.
- This move could further complicate bilateral trade talks. In fact, a US delegation is scheduled to visit India next week to discuss trade agreements.
- This is likely to impact Indian rice exporters and the agricultural sector; the stock market has already shown a reaction—shares of major Indian rice exporters have fallen.
- Furthermore, this move is being seen as an indication of increasing protectionism in global trade—which could also affect other Asian countries.
Challenges and Options for India
- Export Pressure and Market Instability
- Increased tariffs in the US market could be alarming for Indian exporters. Demand for non-basmati rice, which is considered ‘cheap rice’, could fall.
- Investors in the stock market have already reacted negatively, raising fears of economic instability for both corporations and farmers.
- Need to Find Alternative Markets
- Instead of the US, India will have to focus on strategies to find markets in other countries (Europe, the Middle East, Africa).
- Exporters will need to focus on the quality and branding of their rice (such as ‘Basmati’ quality) to compete on value rather than price. 3. Strengthening Diplomatic and Trade Negotiations
- During the upcoming US visit and bilateral talks, India must understand and address US concerns to protect its exports.
- Simultaneously, India must provide balanced support to domestic farmers and exporters – ensuring that farmers’ demands are met while also safeguarding exporters’ incomes.
Conclusion
Donald Trump’s new tariff threat – particularly on Indian rice – is not just an economic issue, but also a move that could reshape global trade, diplomacy, and India-US relations.
If the US actually increases tariffs, it will impact India’s rice exports; it is now time for exporters and the government to change their strategy – focusing on alternative markets, quality-based branding, and robust diplomatic negotiations. India must approach this challenge with prudence and foresight.