US Tariff Boosts Pakistan’s Basmati Rice Exports
The 50% tariff imposed by the United States on Indian goods, including basmati rice, under the Trump administration has significantly reshaped the US aromatic rice market, creating an opportunity for Pakistan to expand its share.
Strong Growth in Pakistani Basmati Exports
Pakistan’s basmati rice exports have shown steady growth. According to the Rice Exporters Association of Pakistan (REAP), the country shipped 772,725 tonnes of basmati in FY24, generating $876.9 million—up from 595,120 tonnes worth $650.4 million in the previous fiscal year. The average export price per tonne also rose from $1,092.93 to $1,134.86.
Key Export Markets
Between November 2023 and October 2024, the United States accounted for 24% of Pakistan’s total basmati exports, totaling 1,519 shipments, according to Volza’s Global Trade platform. Italy followed with 14% (908 shipments) and the United Kingdom with 11% (716 shipments), collectively consuming nearly half of Pakistan’s basmati shipments.
Currently, Pakistan exports basmati rice to over 110 countries, including Australia, Saudi Arabia, the UAE, Canada, the Netherlands, and Germany.
US Buyers Turn to Pakistani Basmati
Read Top Stories
US Department of Agriculture (USDA) data 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% comprising aromatic varieties from Asia, mainly jasmine from Thailand and basmati from India and Pakistan.
While the US produces some aromatic rice domestically, it differs in aroma and quality from Asian varieties, and demand is expected to keep rising.
Tariff Dispute Gives Pakistan a Competitive Edge
The US tariff on Indian basmati was introduced amid trade tensions over India’s ties with Russia, affecting multiple Indian exports. While some products later received exemptions, basmati rice remained subject to the full 50% duty. Pakistani basmati, by contrast, faces a 19% tariff, giving it a significant price advantage.
Indian media predicts the tariff could reduce India’s basmati exports to the US by up to 80%, pushing prices to nearly $1,800 per metric tonne. With Pakistani basmati currently priced around $1,450 per metric tonne, US importers and retailers are increasingly turning to Pakistan as a preferred supplier.