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Hindustan Times
09-08-2025
- Business
- Hindustan Times
Basmati growers in Punjab, Haryana fear deep setback for grain exports to US
The 50% tariff imposed by the Trump administration has left Punjab and Haryana basmati growers and exporters deeply worried, fearing a severe impact on aromatic grain exports to the US as neighbouring Pakistan gains a significant competitive advantage. The punitive tariff rate — among the highest imposed on any US trading partner — stems from Trump's August 7 executive order adding a 25% penalty for India's Russian oil purchases on top of an existing 25% reciprocal tariff, with the combined levy taking effect August 28. 'It's a double whammy,' said Ranjit Singh Jossan, vice-president of the basmati exporters association, explaining that India exports nearly 300,000 tonnes (worth $350 million) to the US annually and the steep tariffs will hit exporters hard while giving Pakistan—another major producer, with a 19% levy on its goods —a crucial edge. Unlike sectors such as smartphones and pharmaceuticals that remain exempt from Trump's tariff offensive, basmati rice faces the full burden of America's punishment for India's energy relationship with Russia. While Trump raised the rate on Indian imports from an initially planned 26% to 50%, it lowered tariffs on Pakistani from 29% to 19%, making Indian grain 31% costlier. 'India's loss is Pakistan's gain,' Jossan said. 'Traders from the neighbouring country have already started taking orders from the US, but Indian traders are unable to negotiate because of the cost disparity.' A tonne of basmati purchased in the US at $1,200 will cost an additional $600 if imported from India, compared to just $228 extra from Pakistan. 'At this moment, we do not stand a chance to sell our produce in the US,' Jossan added. The new tariff comes at a particularly vulnerable time for the sector, as basmati prices are already sliding. Popular varieties such as 1121 and 1509 have dropped from ₹4,500 per quintal in 2022-23 to ₹3,500-3,600 in 2023-24, and could fall further to ₹3,000, industry sources fear. The decline threatens to push farmers away from basmati cultivation altogether. 'The trend of falling prices may push farmers to abandon basmati in favour of regular paddy, which now has a Minimum Support Price of over ₹2,400 per quintal,' said Gurbakshish Singh, a farmer from Tarn Taran, a border district of Punjab. Singh's family has cultivated basmati for many years, but he remains apprehensive about the lack of price stability. The uncertainty is already reflected in cultivation patterns. Punjab's basmati area has shrunk from 7.63 lakh hectares in 2015-16 to 6.39 lakh hectares in 2024-25. Popular varieties like 1509, 1121, and 1718 cover over 80% of the area but fetch declining prices. Haryana's cultivation area has fluctuated between 6.5-7.1 lakh hectares in recent years, standing at 6.8 lakh hectares in 2025. Punjab and Haryana produce premium quality grain with varieties such as 1121 and 1509 famous globally, accounting for 40% of India's total basmati exports. Punjab alone produces nearly 40% of the country's basmati rice. 'The quantity of basmati exports to the US is just a small portion of total exports from India, but it disturbs the overall trade and cropping pattern,' said Jagdeep Singh Aulakh, a farmer from Badshahpur village in Karnal district, Haryana. Jossan said smaller exporters with annual turnovers of about ₹100 crore are bearing the brunt. They have slashed procurement prices from ₹7,100 to ₹6,200 per quintal, pushing down wholesale domestic prices from ₹71 to ₹62 per kg, with retail prices likely to follow. Millers face huge losses due to unsold basmati stocks piling up. 'Exporters won't buy unless the situation improves,' Jossan said. Anil Mittal chairman-cum-managing director of KRBL Limited, which sells premium grain under Indian Gate basmati rice, said that he is hopeful that the situation will not last for a long time. 'The Indian government is actively negotiating with the US. We have good brands, which have no match elsewhere in the world,' he added.
Hindustan Times
08-08-2025
- Business
- Hindustan Times
Donald Trump's tariffs may hand Pakistan's basmati market advantage
The 50% tariff imposed by the Trump administration has left Punjab and Haryana basmati growers and exporters deeply worried, fearing severe impact on aromatic grain exports to the US as neighbouring Pakistan gains a significant competitive advantage. Unlike sectors such as smartphones and pharmaceuticals that remain exempt from Trump's tariff offensive, basmati rice faces the full burden of America's punishment for India's energy relationship with Russia. (HT PHOTO) The punitive tariff rate — among the highest imposed on any US trading partner — stems from Trump's August 7 executive order adding a 25% penalty for India's Russian oil purchases on top of an existing 25% reciprocal tariff, with the combined levy taking effect August 28. 'It's a double whammy,' said Ranjit Singh Jossan, vice-president of the basmati exporters association, explaining that India exports nearly 300,000 tonnes (worth $350 million) to the US annually and the steep tariffs will hit exporters hard while giving Pakistan—another major producer, with a 19% levy on its goods —a crucial edge. Unlike sectors such as smartphones and pharmaceuticals that remain exempt from Trump's tariff offensive, basmati rice faces the full burden of America's punishment for India's energy relationship with Russia. While Trump raised the rate on Indian imports from an initially planned 26% to 50%, he lowered tariffs on Pakistani imports from 29% to 19%, making Indian grain 31% costlier. 'India's loss is Pakistan's gain,' Jossan said. 'Traders from the neighbouring country have already started taking orders from the US, but Indian traders are unable to negotiate because of the cost disparity.' A tonne of basmati purchased in the US at $1,200 will cost an additional $600 if imported from India, compared to just $228 extra from Pakistan. 'At this moment we do not stand a chance to sell our produce in the US,' Jossan added. The new tariff comes at a particularly vulnerable time for the sector, as basmati prices are already sliding. Popular varieties such as 1121 and 1509 have dropped from ₹4,500 per quintal in 2022-23 to ₹3,500-3,600 in 2023-24, and could fall further to ₹3,000, industry sources fear. The decline threatens to push farmers away from basmati cultivation altogether. 'The trend of falling prices may push farmers to abandon basmati in favour of regular paddy, which now has a Minimum Support Price of over ₹2,400 per quintal,' said Gurbakshish Singh, a farmer from Tarn Taran, a border district of Punjab. Singh's family has cultivated basmati for many years, but he remains apprehensive about the lack of price stability. The uncertainty is already reflected in cultivation patterns. Punjab's basmati area has shrunk from 7.63 lakh hectares in 2015-16 to 6.39 lakh hectares in 2024-25. Popular varieties like 1509, 1121, and 1718 cover over 80% of the area but fetch declining prices. Haryana's cultivation area has fluctuated between 6.5-7.1 lakh hectares in recent years, standing at 6.8 lakh hectares in 2025. Punjab and Haryana produce premium quality grain with varieties such as 1121 and 1509 famous globally, accounting for 40% of India's total basmati exports. Punjab alone produces nearly 40% of the country's basmati rice. 'The quantity of basmati exports to the US is just a small portion of total exports from India, but it disturbs the overall trade and cropping pattern,' said Jagdeep Singh Aulakh, a farmer from Badshahpur village in Karnal district, Haryana. Jossan said smaller exporters with annual turnovers of about ₹100 crore are bearing the brunt. They have slashed procurement prices from ₹7,100 to ₹6,200 per quintal, pushing down wholesale domestic prices from ₹71 to ₹62 per kg, with retail prices likely to follow. Millers face huge losses due to unsold basmati stocks piling up. 'Exporters won't buy unless the situation improves,' Jossan said.
Time of India
15-06-2025
- Business
- Time of India
Basmati exporters grapple with Iran conflict; Pakistan benefits via barter trade
1 2 3 4 With indesign box attached in CCI Chandigarh: Rising tensions between Iran and Israel have cast a long shadow over India's basmati rice exports, with exporters warning that any disruption to shipping through the Strait of Hormuz could cripple trade with Gulf countries and hand long-term strategic advantage to Pakistan. At the heart of the concern is the possible closure of the Strait of Hormuz — a vital maritime chokepoint through which almost 30% of global crude oil and 20% of natural gas pass. Indian exporters fear that an escalation in conflict could force ships already en route to turn back, leading to steep financial losses. "If the basmati consignments do not reach their destination, it will mean a huge loss for us," said Ranjit Singh Jossan, vice-president of the Punjab Basmati Rice Millers and Exporters Association. Iran is one of India's largest basmati buyers, accounting for more than 8.55 lakh metric tonnes in the year 2024–25, valued at ₹6,374 crore. This represents 30-35% of India's total basmati exports in peak years, with Iranian consumers preferring Indian rice for its aroma, grain length and flavour. However, delays in payments from private Iranian traders — often ranging between six to eight months — have strained Indian exporters' working capital. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Tourmaline Sock That Soothes Foot Pain and Burning TourmaRelief Undo Even state-affiliated buyers such as the Govt Trading Corporation (GTC) have taken up to 180 days to process payments, prompting some Indian exporters to redirect their shipments to lower-margin markets. Amid this uncertainty, Pakistan has moved swiftly to gain ground in Iran. Leveraging a shared land border and the absence of formal banking restrictions, Pakistan has engaged in barter trade with Iran — exchanging rice for petroleum, copper and electricity. Its advantage in logistics and payments has allowed it to consolidate market share, filling the void left by India's constrained position. "India should not let Pakistan capture a market where we have held cultural and culinary primacy for decades," said Jossan. "Regaining that lost ground may take years, if not decades." The roots of India's declining trade with Iran date back to 2019, when US sanctions prompted India to halt crude oil imports from the country. The collapse of the previous rupee-rial oil payment mechanism severed a critical channel for Iranian buyers to fund Indian imports, including basmati rice and pharmaceuticals. The ripple effects are being felt again this year. Cargo insurance premiums through the Red Sea and Persian Gulf have jumped by 20%, increasing costs for exporters. Analysts warn that further disruption in maritime trade could temporarily drive up basmati prices in Gulf countries by 5-15% and trigger inflation-mitigation measures such as subsidies or tariff adjustments by regional govts. In Punjab, growers and traders remain on edge. A similar flare-up in 2023 had already led to reduced orders and a sharp fall in the price of Basmati 1509, a key export variety. As India's strategic grip on the Iranian rice market loosens, exporters argue that a recalibration of trade policy is urgent. Without it, they warn, India risks losing not just revenue but also its longstanding cultural and commercial ties to a key consumer market. MSID:: 121848722 413 | Follow more information on Air India plane crash in Ahmedabad here . Get real-time live updates on rescue operations and check full list of passengers onboard AI 171 .
