India’s Basmati Rice exports to US have been heavily affected by the floods in different states and the US tariffs of 50% on Indian goods. The US tariffs on Indian goods, initially 25% and 25% further, for purchasing Russian oil, are anticipated to make India Basmati rice more expensive for the rice consumers of the US.
How could the US Tariff impact India’s Basmati Rice Exports to the US?
Undoubtedly, India holds a significant share in the global market, as it offers the world 65% of its basmati supply. The rest of the rice comes from Pakistan. Consequently, the Indian price of exporting Rice related to India’s Basmati rice exports could increase sharply due to the imposition of US tariffs on Indian goods, since Pakistan is facing only a 19% tariff. Mudassar Ahmed, a Pakistani agricultural Cooperative, considered US tariffs on Indian goods a positive thing.
Impact of the Punjab Floods on Basmati Rice exports
On a related note, the breadbasket of India, called Punjab, which shares borders with Pakistan’s Punjab province, has experienced the floods washing farmland and leaving people stranded.
According to the sources of IREF, the floods submerged around 150,000, an estimated 10% of potential output. Punjab province in Pakistan has also flooded, with the region producing 90% of the country’s Basmati rice. Officials estimate that 30 to 35% of their basmati output may have been affected, with the overall basmati damage being up to 10% or 15%. According to the Pakistan Bureau of Statistics, Pakistan exported approximately 772,725 tons of basmati rice in the last fiscal year, earning $876.9 million, a rise from 595,120 tons when compared to the year before.
Moreover, as per the Indian Agricultural and Processed Food Products Export Development Authority, India, in the last fiscal year, exported 234,467 metric tons of basmati rice, which is valued at $300 million to the U.S. alone.