The United States’ 50% tariff on Indian goods, including basmati rice, introduced under the Trump administration, has significantly reshaped the American aromatic rice market, opening the door for Pakistan to boost its share.
Pakistan’s Basmati Exports See Strong Growth
Pakistan’s basmati rice exports have been on a steady rise. According to the Rice Exporters Association of Pakistan (REAP), the country shipped 772,725 tonnes of basmati in FY24, earning $876.9 million, up from 595,120 tonnes worth $650.4 million the previous fiscal year. The average export price per tonne also increased from $1,092.93 to $1,134.86.
Key Markets Driving Sales
Between November 2023 and October 2024, the US accounted for 24% of Pakistan’s total basmati exports, amounting to 1,519 shipments, according to Volza’s Global Trade platform. Italy followed with 14% (908 shipments) and the UK with 11% (716 shipments), meaning these three markets together consumed nearly half of Pakistan’s total basmati shipments.
Currently, Pakistan exports basmati rice to over 110 destinations, including Australia, Saudi Arabia, the UAE, Canada, the Netherlands, and Germany.
Why US Buyers Prefer Pakistani Basmati
Data from the US Department of Agriculture (USDA) shows rice imports in the US have grown from 7% of the domestic market in 1993/94 to over 25% by 2022/23, with more than 60% consisting of aromatic varieties from Asia, primarily jasmine from Thailand and basmati from India and Pakistan.
While the US produces some aromatic rice locally, it differs in aroma and quality from its Asian counterparts, with demand projected to keep growing.
Tariff Dispute Gives Pakistan a Price Advantage
The US tariff on Indian basmati stems from trade tensions over India’s ties with Russia, which triggered broad duties on multiple Indian exports. While some goods later received exemptions, basmati rice remained subject to the full 50% tariff. In contrast, Pakistani basmati faces a 19% duty, giving it a clear price edge.
Indian media projects the tariff could slash India’s basmati exports to the US by up to 80%, with prices soaring to nearly $1,800 per metric tonne. Pakistani basmati, currently priced around $1,450 per metric tonne, is increasingly attractive for US importers and retailers.
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