Trump tariff jitters fade as Indian rice stocks stage a rebound despite Iran worries

India's listed rice other products exporters players including KRBL, LT Foods, AWL Agri Business and other shrugged-off the latest announced tariffs on Iran's trading partners. All these stocks rebounded from the mild early jitters after the US President Donald Trump announced an additional 25 per cent tariff on countries doing business with Iran.

"Effective immediately, any country doing business with the Islamic Republic of Iran will pay a tariff of 25 per cent on any and all business being done with the United States of America. This order is final and conclusive," the US president said in a post on Truth Social. Tariffs are paid by US importers of goods from those countries.

The exporter of Daawat brand, LT Foods Ltd recovered more than 4 per cent to 366.75, with a total market capitalization of Rs 12,700 crore. Shares of KRBL Ltd, the parent of India Gate rice, rebounded more than 3.35 per cent to Rs 363 on Tuesday, commanding a total marketcap of Rs 8,250 crore.

Shares of AWL Agri Business Ltd rose more than 2 per cent 225.50 on Tuesday, with its mcap nearing Rs 29,000 crore, while GRM Overseas Ltd gained more than 8 per cent from day's low. Other penny stocks like HMA Agro Products Ltd and Sarveshwar Foods Ltd were down up to 2 per cent each.

The US is a small but valuable market for Indian rice. India exported roughly 234,000 tonnes of rice to the US in FY24, accounting for less than 5 per cent of its global basmati exports. According to rice traders, tariff hike is not a major concern. The US remains the least price-elastic market and, being a small market for India, it is relatively easy for exporters to diversify.

Iran is among the top destinations for Indian basmati rice. In FY25, India exported around 8.5 lakh tonnes of basmati rice to Iran, ranking it as a major buyer after Saudi Arabia and Iraq. Iran accounted for roughly 12-20 per cent of India's total basmati rice exports. India's total rice exports in FY25 stood at 21.55 million metric tonnes, up 19.4 per cent on a yearly basis.

For India, Radhika Rao, Executive Director and Senior Economist at DBS Bank, said the scale of total goods trade with Iran had narrowed sharply to less than 0.5 per cent since 2018–19 following broader global restrictions.

India's export to Iran is estimated to be less than $2 billion which includes products like rice, oil meals, tea, spices, pharma, meat and dairy products.On the other hand, a sharp collapse of Iran’s currency Rial, leading to payment delays, has affected India’s basmati rice exports, leaving consignments worth nearly Rs 2,000 crore stranded at major ports such as Kandla and Mundra, said The Indian Rice Exporter Federation.

Dr VK Vijayakumar of Geojit Financial said Trump’s weaponisation of tariffs has already impacted global trade, particularly for countries targeted with punitive measures. He said Trump’s latest declaration on imposing 25 per cent tariffs on countries trading with Iran clearly signalled that this policy would continue.

“Apart from targeting other countries, Trump is also targeting those who do not toe his line at home. The charges levelled against the Fed chief Jerome Powell are an example of the fact that Trump will go against anyone who does not fall in line. This unprecedented, unstable and unpredictable behaviour of the US president will continue to weigh on markets,” Vijayakumar said.