US Tariffs on Indian Rice Shift Market in Pakistan’s Favor

A steep US tariff on Indian basmati rice has opened the door for Pakistan to capture a bigger slice of America’s premium rice market.

In 2018, the Trump administration slapped a 50% duty on several Indian goods — including basmati rice — as part of a trade dispute linked to India’s ties with Russia. While some Indian exports later received relief, rice was not among them. That decision has now reshaped the supply landscape in the US, where importers are increasingly turning to Pakistani basmati as a more affordable alternative.

Pakistan’s Exports Surge

Pakistan’s basmati shipments have been climbing steadily. Official figures from the Rice Exporters Association of Pakistan show that in FY24, exports hit 772,725 tonnes, bringing in $876.9 million. That’s a 35% jump from the previous year’s 595,120 tonnes worth $650.4 million. The average selling price also nudged higher — from $1,092.93 per tonne to $1,134.86.

The US has emerged as a key customer. Between November 2023 and October 2024, it bought nearly a quarter of Pakistan’s basmati exports, according to Volza trade data. Italy (14%) and the UK (11%) followed, meaning these three markets alone account for almost half of Pakistan’s total basmati shipments. In all, the country now supplies its aromatic rice to more than 110 nations, including Australia, Saudi Arabia, the UAE, Canada, the Netherlands, and Germany.

Why the US Market Matters

Americans are eating more imported rice than ever before. USDA data shows imports have grown from 7% of the domestic market in the early 1990s to over 25% by 2022–23. Over 60% of these imports are aromatic varieties from Asia, with Thai jasmine and Indian or Pakistani basmati dominating the category.

While the US grows some aromatic rice domestically, it lacks the fragrance and texture prized in the Asian varieties — a gap imports are happy to fill. With demand projected to rise further, any pricing advantage can mean significant market gains.

India’s Setback, Pakistan’s Opening

For India, the 50% US tariff has pushed basmati prices close to $1,800 per metric tonne — far above Pakistan’s roughly $1,450. That difference is proving decisive. Indian media outlets report exporters could lose 50–80% of their US business as a result. Pakistani rice, facing a lower 19% duty, is stepping into the gap.

The shift is already visible at retail level. In Springfield, Virginia, grocery store salesman Khan Mohammed says the demand for Pakistani rice is climbing: “Pakistani rice is already popular, but now more customers are asking for it because the price is better.”