Rice exporters cheer as US cuts tariffs to 18%, boosting India’s export competitiveness

Rice exporters have welcomed the sharp reduction in US tariffs on Indian goods from 50% to 18%, saying the move will make Indian exports more competitive in the American market.

KRBL Ltd, the producer of India Gate basmati rice, said exports to the United States are likely to regain competitiveness. “The recent announcement of the US–India bilateral trade deal marks an important and encouraging development for India’s basmati rice industry. The reduction in reciprocal tariffs from 25% to 18%, effective immediately, is expected to ease export-related cost pressures and provide much-needed support to pricing competitiveness,” said Akshay Gupta, Head – Bulk Exports, KRBL Ltd.

“The removal of the additional 25% duty that had been linked to geopolitical considerations is also a positive step towards normalising trade flows,” Gupta said, adding that such agreements can “significantly strengthen exports of high-value agri-products, leading to improved value realisation across the supply chain and better outcomes for farmers”.

LT Foods, the maker of Daawat basmati rice and a major player in the consumer food space, said the upcoming deal significantly enhances competitiveness in one of the world’s largest consumption markets.

“The reduction in US tariffs is a timely development for companies like LT Foods. A significant portion of our sales comes from the United States, and this agreement removes a key tariff overhang while strengthening our position in an important market. Lower duties are expected to increase demand and improve overall consumer sentiment,” an LT Foods spokesperson said.

“Easing trade pressures at a time of global currency volatility also provides some support to the rupee and contributes to a more stable operating environment for Indian exporters. That said, the long-term implications will become clearer as the market adjusts,” the spokesperson added.

Full details of the deal are expected to be released through a formal India–US joint statement once the final processes are completed.

Fishermen and seafood exporters across coastal regions are also expected to benefit from improved tariff access, Union Commerce Minister Piyush Goyal said while addressing the media on Tuesday. Labour-intensive export sectors such as textiles, apparel, leather, footwear, gems and jewellery, plastics, machinery, aircraft components and marine products are expected to gain significantly, creating large employment opportunities, he added.

Commenting on the announcement, Anish Shah, Group CEO and Managing Director of Mahindra Group, said the deal adds meaningful momentum to India’s growth ambitions. “The immediate reduction in reciprocal tariffs on Indian exports from 50% to 18%, along with the commitment to progressively lower tariff and non-tariff barriers, will boost growth momentum and improve the predictability businesses need to invest with confidence,” Shah said.