Key Highlights:
The Threat: President Trump, during a White House roundtable with farmers, accused India, Vietnam, and Thailand of "dumping" cheap rice into the US market, which he claimed was harming domestic growers. He stated his intention to "take care" of the situation and raised the prospect of new duties.
Market Reaction: Shares of major Indian rice exporters, including LT Foods (Daawat) and KRBL (India Gate), dropped sharply. LT Foods fell by as much as 7-8%, while KRBL also saw declines of over 2%. Kohinoor Foods was among the worst-hit, plunging nearly 10% before a partial recovery.
The Precedent: The market fears are heightened because the US had already imposed a 50% tariff on some Indian goods earlier in the year, and analysts believe the new tariff threat is a tool to pressure India ahead of key bilateral trade talks.
Exporters' View: While the US market is strategically important for premium Basmati rice, it accounts for less than 5% of India's total Basmati exports. Some analysts and exporters suggest that any substantial tariff hike would ultimately make Indian rice more expensive for US consumers rather than having a devastating impact on India's overall export sector, which is highly diversified.