US team in Delhi for talks, Trump threatens tariffs on Indian rice

Picking only India among the three countries named by the farmer representative, Trump asked US Secretary of the Treasury Scott Bessent: “Why is India allowed to do that? They have to pay tariffs. Do they have an exemption on rice?”

When Bessent said the US was still working on a trade deal with India, Trump said, “But they (India) shouldn’t be doing that. I have heard this from others. We will get it settled. Tariffs solve the problem in two minutes. That is why we have to win the Supreme Court case.”

In a statement, Prem Garg, National President of the Indian Rice Exporters Federation (IREF), said Trump’s remarks add another layer of uncertainty at a time when bilateral trade negotiations are already facing unusual delays.

Garg emphasised that India’s rice exports to the US comply fully with World Trade Organisation rules and established bilateral guidelines. He said India exports only basmati rice and its varieties to the US, and that even after the imposition of 50 per cent tariffs, there has been no impact on India’s rice exports and no loss to Indian farmers, as these exports are limited to ethnic basmati varieties.

Indian rice exports to the US are entirely market-driven, based on genuine consumer demand, particularly among ethnic communities that prefer basmati rice, Garg said, adding that new tariffs on rice would actually place a burden on US consumers, not on Indian farmers or exporters.

Ajay Srivastava, founder of think tank GTRI, said India exported $392 million worth of rice to the US in FY2025, just 3 per cent of its global rice exports, and already faces tariffs of about 53 per cent in the US market; 86 per cent of these shipments are premium basmati.

“New duties would scarcely dent Indian exporters, who have strong markets elsewhere, but would make rice costlier for American households,” Srivastava said.

“India should read this as election-season messaging to US farmers – not a serious policy shift – and avoid offering concessions to a threat that hurts US consumers more than Indian producers,” he said.

Trump’s comment on the case in the US Supreme Court comes at a time when the court is deciding if he has overstepped his powers granted under the International Emergency Economic Powers Act (IEEPA) to impose sweeping reciprocal tariffs.

If the administration loses the case, the reciprocal tariffs will be declared invalid, and the Trump administration may have to initiate refunds to the tune of $100 billion to US importers. According to an estimate by PwC, total tariff collections by the end of October stood at $108 billion, with China having the biggest share at $34 billion. In the case of India, the comparable figure stood at $487 million.

“If the Supreme Court strikes down the Trump administration’s IEEPA tariff scheme entirely, the decision could declare the challenged tariffs invalid, requiring US Customs and Border Protection (CBP) to cease collection and unwind the existing tariff structure. At the same time, importers could face the complex question of how to obtain refunds, as invalidation of the IEEPA tariffs may open the door to potential reimbursement of tariffs paid,” PwC said in a report.

Three lower courts have already ruled against the Trump administration. The case was first heard in the US District Court for the Northern District of Illinois, which in April rejected the government’s argument. The US Court of International Trade (CIT) in June also held that the IEEPA does not authorise the President to levy general tariffs. The US Court of Appeals for the Federal Circuit in August ruled that the Congress had never delegated such sweeping authority to the executive branch.