US President Donald Trump has criticised India for “dumping” rice into the United States, signalling potential additional tariffs. His remarks have stirred global attention and impacted Indian stock markets. Trump claimed tariffs would swiftly resolve the issue, while unveiling USD 12 billion in aid for US farmers.

During a White House roundtable on Monday with farming and agriculture representatives, Trump addressed challenges faced by domestic producers. Treasury Secretary Scott Bessent and Agriculture Secretary Brooke Rollins were present.

Meryl Kennedy of Kennedy Rice Mill, Louisiana, told Trump that southern US rice producers are “really struggling” due to foreign imports. “India, and Thailand; even China into Puerto Rico. Puerto Rico used to be one of the largest markets for US rice. We haven't shipped rice into Puerto Rico in years,” she said.

Trump responded: “But they shouldn't be dumping. I mean, I heard that. I heard that from others. They can't do that.”

Trump indicated that tariffs could quickly correct the situation. “It's solved so quickly with tariffs to these countries that are illegally shipping. It's solved. Your problem is solved in one day. That's why we have to win the Supreme Court case,” he said, referring to legal challenges to his emergency powers used for tariffs.

Trump compared the rice situation to losses in the US car and chip industries. “It's the same thing with rice. It'll be good, will get it solved very quickly. We just need the countries. Just give us the names of the countries. Tariffs, again. It solves the problem in two minutes,” he added.

Kennedy pointed out that foreign companies have also “bought the largest brands at retail”, creating incentives to subsidise their products. Trump promised, “We'll take care of it. It's so easy.”

India’s rice exports and market share

India is the world’s largest rice producer, with 150 million tonnes and a 28 per cent share of global production. It is also the top exporter, accounting for 30.3 per cent of global exports in 2024–25, according to the Indian Rice Exporters Federation (IREF).

India exported about 2.34 lakh tonnes of rice to the US in the 2024 fiscal, less than 5 per cent of its global basmati rice exports of 52.4 lakh tonnes. West Asia remains the dominant destination for Indian rice. Among exported varieties, ‘Sona Masoori’ is preferred in markets such as the US and Australia.

The US is among India’s key Basmati rice export partners, alongside the UK and Middle East. Basmati exports to the US rose from 160,895 tonnes ($0.18 billion) in FY 2021–22 to 234,467 tonnes ($0.31 billion) in FY 2023–24, representing roughly 5 per cent of total Basmati exports. Non-Basmati rice shipments to the US are negligible.

Trump has already imposed a 50 per cent tariff on Indian exports, including 25 per cent on rice. Prem Garg, National President of IREF, described the tariff as a temporary “hurdle” rather than a long-term obstacle, adding that Indian exporters retain a pricing advantage over competitors such as Vietnam and Pakistan.

Immediate impact on Indian stock markets

Indian equities reacted sharply on Tuesday following Trump’s remarks. Nifty 50 opened at 25,867.10, down 93.45 points (-0.36 per cent), while the BSE Sensex began at 84,742.87, declining 359.82 points (-0.42 per cent).

Sectoral indices also fell, with Nifty Media, Metal, and IT losing over 1 per cent, Nifty Auto down 0.77 per cent, Nifty Pharma 0.44 per cent, and Nifty PSU Bank 0.72 per cent. Broad market pressure reflected a general sell-off across Nifty 100 (-0.56 per cent), Midcap (-0.81 per cent), and Smallcap (-0.84 per cent).

Experts highlighted oversold conditions. Ajay Bagga, banking and market expert, told ANI: “Trump's remarks on levying additional tariffs on Indian rice exports are spoiling the anticipation of any relief from the visit of a high-powered US trade delegation to India. FPI positioning is back to an 88 per cent net short position with continued FPI outflows adding to liquidity outflows due to promoter selling and record primary market issuances.”

Ponmudi R, CEO of Enrich Money, added: “Indian equity markets enter today’s session in a cautious consolidation phase. Global cues remain mixed ahead of the crucial US Federal Reserve policy decision. Nifty 50 continues to remain in a sideways-to-bullish structure as long as it holds above the key 25,850 support.”

Across Asia, Japan’s Nikkei 225 gained 0.35 per cent, while Hong Kong’s Hang Seng fell 0.8 per cent, Taiwan’s weighted index lost 0.30 per cent, and South Korea’s KOSPI declined 0.72 per cent, reflecting regional weakness.

Trade talks and uncertainty

India continues negotiations with the US, but no major breakthrough has been reported. Trump faces political pressure over high domestic prices and inflation ahead of next year’s midterm elections, adding urgency to his trade policies.

While the US president has not clarified when or how additional tariffs on Indian rice would be imposed, Indian officials remain engaged in talks with the visiting US delegation. Previously, agriculture was a sticking point, with Washington seeking broader access to India’s farm sector.