Indian basmati rice exports suffer from tariffs while Pakistan looks to gain
- Severe flooding in Punjab, India has devastated agricultural lands crucial for basmati rice production.
- The U.S. has imposed a 50% tariff on Indian basmati rice, significantly increasing its cost for American consumers.
- Pakistan may benefit from this tariff situation, potentially increasing its share of the basmati rice export market.
The agricultural landscape in India and Pakistan is undergoing severe challenges as both countries face unprecedented flooding impacting their basmati rice production. As of September 2025, Punjab in India has experienced the worst flooding since 1988, devastating agricultural lands and severely affecting basmati rice – a high-value crop for farmers. The Indian Rice Exporters' Federation reported that floods submerged over 150,000 hectares, translating to an estimated 10% loss of potential output. This disaster coupled with significant financial burdens on farmers poses a risk of defaults among producers, further jeopardizing the economy of an area that heavily relies on rice cultivation. Meanwhile, the economic situation is adversely compounded by the tariffs imposed by the Trump administration, initially set at 25% and further increased by an additional 25%. These tariffs target Indian goods amid allegations of the country facilitating the importation of Russian oil. Indian basmati rice, revered for its quality, is now priced significantly higher, with a projected 50% duty on exports to the U.S. creating alarming competitive disadvantages against Pakistani basmati rice, which faces only a 19% tariff. This discrepancy could potentially price Indian basmati out of the U.S. market, giving Pakistan an edge in exports. As a result, stakeholders in the region perceive these tariffs as favorable for Pakistan's agricultural economy. Pakistani cooperatives and the Rice Exporters Association have expressed optimism, forecasting an increase in their market share, as Indian rice becomes inaccessible to American consumers due to inflated pricing. Last fiscal year, Pakistan exported approximately 772,725 tons of basmati, generating significant revenue compared to India's exports of 234,467 metric tons valued at $300 million to the U.S. alone. Given the importance of basmati rice within the national economies of both countries, the combination of flooding, tariffs, and competitive market dynamics poses a crisis. This scenario demands urgent attention from government and agricultural bodies to devise strategies that will support farmers facing disaster and help them recover from both natural calamities and economic impediments.