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Mint
01-08-2025
- Business
- Mint
Farm exporters scramble for new markets as US levies high duties on Indian goods
New Delhi: Exporters of India's food and agricultural products are scrambling to recalibrate their global strategies after the United States unexpectedly slapped steep tariffs on a range of goods, dealing a blow to the country's $50 billion-plus farm shipments. While industry players view it as a short-term setback, many believe the disruption may ultimately open doors to new markets and realign global trade flows. 'India exports around 2-2.5 lakh tonnes of basmati rice annually to the US. The steep hike in tariffs has come as a surprise to the exporters," said Satish Goel, president, All India Rice Exporters' Association. Goel added that exporters like him have raised the issue with the ministry of commerce and industry and are exploring alternative destinations, even as buyers in the US hit a pause. 'In the meantime, the basmati exporters are scouting new markets such as Indonesia, where the exposure of non-basmati rice is more," he added, US president Donald Trump announced a 25% tariff on Indian goods starting 1 August, citing New Delhi's high trade barriers, and an additional 'penalty" for the country's continued purchases of oil and weapons from Russia. The US duty on select Indian exports has particularly hit sectors such as shrimp, basmati rice, fresh fruits, vegetables and frozen foods. Meanwhile, some exporters say their US buyers have already started deferring purchases after the latest tariff announcement by Trump. 'The US-based importers told us to stop any fresh packaging and shipments other than which is already in transit," said a basmati rice exporter from Haryana, who spoke under the condition of anonymity. 'They have informed us that they wish to assess the situation first before receiving any fresh consignment," the person added. Meanwhile, the blow is even harsher for seafood exporters, now facing a cumulative tariff burden of 35%, including countervailing and anti-dumping duties. This puts Indian exporters at a disadvantage compared to rivals like Ecuador, which faces only 19% duties. To be sure, shrimp remains one of India's top seafood exports, with the US being the largest market. In FY25, India exported marine products worth over $6 billion, with frozen shrimp accounting for a major share, according to data from the Marine Products Export Development Authority. The increase in tariff from the existing 10% to 25% with effect from 1 August comes in addition to the countervailing duty at 5.77% and anti-dumping duties, to which seafood exported from India is subjected in the US, said K.N. Raghavan, secretary general, Seafood Exporters Association of India. 'While the increase in tariffs and differential rates applied to different countries have created an uneven playing field for seafood exporters from India, the lingering uncertainty due to the threat of imposition of additional duty as a penalty has added to the difficulties faced by them," he added. Raghavan added that the absence of clarity and certainty regarding the rate of import duty creates an environment that is not conducive to a smooth conduct of trade and commerce among countries. Meanwhile, exporters of fresh fruits and vegetables are also bracing for impact of US tariffs. Ekram Husain, vice president of the VAFA Fresh Vegetables and Fruits Exporters Association (Maharashtra), said that while this season's mango shipments have already been dispatched, exports of pomegranates and other produce could be at risk. 'It is too early to say, but if the exporters don't find viable, then they might hunt for new territories," he added. Experts point out that India's dependence on a handful of export markets has come under renewed scrutiny after the latest US tariff salvo, highlighting the urgent need for market diversification, value addition and trade resilience. 'In response, India should engage in diplomatic negotiations with the US, explore new export markets in Asia, Africa and Latin America, and accelerate free trade agreements with other nations," said Preet Sandhu, founder and managing director, AVPL International, a drone technology and precision agriculture technology firm. She added that the ongoing challenges could catalyse a transformation towards a more competitive, self-reliant and globally integrated agri-economy in the long run. M.K. Dhanuka, chairman, Dhanuka Agritech Ltd, an agrochemical company, said that the decision to impose a 25% tariff on Indian exports, coupled with other penalties based on India's strategic alignments, brings a multi-dimensional layer of uncertainty to India's agricultural economy. 'A fall in agri-export earnings due to excessive tariffs can itself weaken farmer morale, increase purchase cycles, and discourage investment in productivity-enhancing inputs," he said. In the longer run, this can stifle innovation in agriculture, when Indian agriculture needs to modernize at the earliest to stay competitive globally, he added.
Mint
15-06-2025
- Business
- Mint
Govt to hold talks with exporters as Iran-Israel conflict stalls shipments, drives up costs
New Delhi: As the armed conflict between Iran and Israel threatens to disrupt trade routes across West Asia, the government will talk to exporters to assess the impact and chart a response, three officials aware of the development told Mint. The discussions will be aimed at safeguarding India's exports to the United Arab Emirates, Saudi Arabia, Qatar, Oman, Iran, Iraq, Kuwait, and Israel, along with major European markets, the officials said on the condition of anonymity. The conflict has escalated concerns over the safety of cargo passing through the Strait of Hormuz and the Red Sea, a critical maritime corridor for Indian exports. Shipping delays, rising freight charges, and limited insurance coverage are already being flagged by exporters and trade bodies, they said. Also read: Mint Explainer: How the Israel-Iran conflict can crash India's growth party 'As the situation has escalated only recently, we are closely monitoring developments and will engage with exporters and relevant industry groups to formulate a strategy that minimises the disruption to trade," said one of the three officials cited above. 'The discussion will be centred around finding a way out of the crisis and ensuring that trade flows are preserved to the extent possible." Export promotion councils, including those representing engineering goods, basmati rice, textiles, and pharmaceuticals, have raised an alarm. 'The geopolitical tensions will have a major impact on India's export-oriented trade to Europe and West Asia, as the Red Sea is a key route," said Arun Kumar Garodia, former chairman of the Engineering Export Promotion Council (EEPC). 'The conflict will force shipments to take alternate, longer routes via the Cape of Good Hope (South Africa), adding to the cost burden on traders and importers," he said. 'This disruption is likely to affect India's overall trade performance, which may be reflected in the coming months' export data." Queries emailed to the commerce ministry remained unanswered till press time. Also read: Mint Explainer | Strait of Hormuz: Will Iran shut the vital oil artery of the world? For trade promotion bodies, the key concern is the 50% rise in shipment costs just days after the escalation began, and these are anticipated to increase even more after 1 July, the second official quoted earlier said. Basmati exporters have raised concerns over growing uncertainty in the Iranian market, one of India's top destinations for the commodity. With consignments lying at Indian ports and many shipments in transit, exporters fear that any delay could cost them the critical mid-June to mid-July delivery window, before Iran begins harvesting its domestic rice crop. 'Iran typically imposes a seasonal import ban by mid-July to protect local farmers. If tensions persist, we could miss the shipment window entirely," said Satish Goel, president of the All India Rice Exporters Association (AIREA). India's rice exports to Iran rose to $757.30 million in FY25 from $689.80 million a year earlier, accounting for nearly 76% of India's total agricultural shipments to the country. Iran alone buys around one million tonnes of Indian basmati rice annually, or about 12% of India's total basmati exports, which stood at $5.94 billion in FY25. 'We are in a Catch-22 situation. With tensions escalating, many exporters have put their shipments on hold, even though consignments are already lying at the ports," Goel said. 'If the situation doesn't stabilise soon, exporters could end up bearing heavy losses." According to exporters, some ships in transit may be forced to turn back if the conflict drags on, while insurance remains another sticking point. Also read: India in anti-dumping crosshairs: US, Pakistan target Indian exports at WTO 'The major concern flagged by trade bodies is that many of these consignments may not be insured, as insurance companies typically refuse coverage for shipments headed to war or conflict zones," said the third official. Several other Gulf nations and nearby economies may face trade disruptions if shipping lanes become inaccessible or unsafe. The UAE, one of India's largest trading partners, could face delays in receiving food items, textiles and engineering goods. Saudi Arabia, Oman, Qatar, Iraq, and Kuwait are similarly vulnerable due to their dependence on maritime imports, the official said. 'The ongoing Iran-Israel conflict is expected to significantly impact India's trade with Europe, given that much of the cargo to the continent transits through the Red Sea and the Suez Canal," said S. Ramakrishna, former chairman and now advisor of the Federation of Freight Forwarders' Associations in India (FFFAI). India's exports to Europe stayed almost unchanged over the previous year at $98.34 billion in FY25, according to official trade data. Israel, which imports high-value Indian goods like pharmaceuticals and machinery, may also experience setbacks in port operations and air cargo services if the situation escalates.
Mint
14-05-2025
- Business
- Mint
India eyes bumper basmati crop as short-duration variety acreage set to rise 10%
NEW DELHI : India is set to solidify its status as the world's largest basmati rice producer, with the acreage under short-duration basmati varieties expected to surge by up to 10% this Kharif season (June to October) — a shift driven by better prices, faster crop cycles, and rising export momentum. "We are anticipating increase in area of short duration basmati varieties by 7-10% as farmers got remunerative price last year," said Satish Goel, president, All India Rice Exporters Association (AIREA). Short-duration basmati varieties mature in 115–125 days — about 20–25 days earlier than longer-duration types — allowing farmers to save on input costs, better manage stubble, and grow an additional crop in between. This shift is expected to push India's total basmati acreage beyond 3 million hectares, further strengthening its lead in global exports. Also read: Mint Primer | This rice is set to make your meal climate-friendly Remote sensing expert supports this view. 'As per initial estimates, the area under short-duration basmati varieties would increase by at least 7% across all the major basmati-growing belts," said Dr Dharmesh Verma of Anvik Value Chain Pvt Ltd, which conducts crop surveys using satellite imagery and field assessments. Top basmati belts Punjab, Haryana, and western Uttar Pradesh continue to be the top basmati-producing states. Punjab led last year with 1 million hectares under basmati, followed by Haryana (0.97 million hectares) and western UP (0.81 million hectares). Amritsar district alone accounted for the largest basmati area in Punjab, followed by Muktsar and Tarn Taran. In 2024, long-duration basmati varieties accounted for 53.7% of the total area of 2.88 million hectares under basmati cultivation, while short-duration types covered 46.3%. This year, with the expected rise in acreage, the share could increase further. In Punjab, 1 million hectares out of a total 3.27 million hectares under paddy were planted with basmati last year. Also read: Biryani boom drives surge in basmati rice demand across India Among the most widely cultivated short-duration varieties are Pusa Basmati-1509, Pusa Basmati-1692, and Pusa Basmati-1847. Pusa-1509, in particular, matures about 20 days earlier than the traditional PB-1121 variety, offering farmers significant advantages. Many farmers in Amritsar are shifting from short-duration paddy to short-duration basmati due to better returns and less dependency on government procurement, said Arjun Singh, a farmer and sarpanch from Hoshiarnagar, Punjab. The adoption of short-duration varieties enables the planting of short-season crops like vegetables between wheat harvesting and paddy sowing, improving farm incomes and crop diversity. Export edge The increase in production will cement India's position in export market. In fiscal year 2024-25, with an export of 5.94 million tonnes of premium basmati rice, India outpaced its closest competitor, Pakistan. India has been the largest exporter of rice for a decade now. In 2023-24, the total volume of export was 5.24 million tonnes. Also read: India sets record grain production target of 354.64mt for 2025-26, to help boost rural demand Experts mentioned that although short duration paddy would witness increase in area, however its too early to say on long duration variety which is likely to see some decline this year as compared to last year. 'We foresee an increase in the area of short-duration varieties like PB-1509 and PB-1692, while long-duration varieties such as PB-1121 and PB-1401 may see a decline," said Vijay Setia, former AIREA president. Last year, the total area under long duration basmati was 1.58 million hectares. Queries sent to Ministry of Agriculture & Farmers' Welfare spokesperson remained unanswered. Although, the area under basmati is irrigated but rainfall during monsoon at critical stages plays an important role in deciding the yield. In such a scenario, the arrival of monsoon which is expected to hit India's Kerala on 27 May, five days earlier than usual is a positive sign for basmati growers. The development assumes significance as it raises hope for bumper harvests.
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Business Standard
09-05-2025
- Business
- Business Standard
Basmati prices up on higher demand, not due to India-Pak tensions: AIREA
The trade has not been affected so far and the orders are being fulfilled smoothly, says AIREA president Press Trust of India New Delhi All India Rice Exporters Association President (AIREA) Satish Goel on Friday ruled out any impact on Basmati trade, stressing that the recent increase in prices of the commodity is owing to higher demand and not due to the ongoing India-Pakistan tensions. The export price of Basmati rice varieties --1509 and 1718 -- have inched up slightly since March due to rise in demand and not due to supply disruptions caused due to ongoing military escalations between the two nations, he said. "Not due to ongoing India-Pakistan tensions, the Basmati prices have gone up recently. Prices rose slightly because of higher demand from Saudi Arabia, Iran and Iraq," Goel told PTI. The trade has not been affected so far and the orders are being fulfilled smoothly, he added. AIREA former president Vijay Sethia said in September 2024, Basmati rice, particularly the 1509 variety, were ruling high at Rs 62 per kg. Thereafter, prices dropped mainly due to a bumper crop arrival. Large arrivals of 1509 paddy as well as other Basmati varieties in major producing regions led to downward pressure on prices. The prices of the 1509 paddy variety were ruling down at Rs 52 per kg till February. However, the rise in demand in March pushed the prices slightly upward to Rs 58 per kg, but noted that the prices are still ruling below the September 2024 level. "It has nothing to do with the ongoing tension between the two nations," Sethia noted. India exported around 6 million tonnes of Basmati rice in 2024-25, while Pakistan shipped around 1 million tonnes.
Time of India
09-05-2025
- Business
- Time of India
Basmati price rise due to demand surge, unrelated to India-Pakistan tensions: Exporters body
The recent uptick in Basmati rice prices is driven by increased international demand and not linked to geopolitical tensions between India and Pakistan, according to the All India Rice Exporters Association ( AIREA ). AIREA President Satish Goel clarified that the export prices of Basmati varieties 1509 and 1718 have seen a slight rise since March due to higher demand from countries like Saudi Arabia, Iran, and Iraq. "The price movement is demand-driven. There is no disruption in trade due to India-Pakistan tensions," Goel told news agency PTI. He emphasized that export operations continue without interruption and all orders are being fulfilled smoothly. Operation Sindoor Operation Sindoor: 'India won't give face-saving exit to Pak army chief Asim Munir' Pak def min gives absurd excuse for army's failure to withstand Op Sindoor '1971 war was not remotely as terrifying': Residents of border areas shell-shocked Backing this view, former AIREA president Vijay Sethia noted that the prices of the 1509 variety, which peaked at Rs 62 per kg in September 2024, declined following a bumper harvest. A significant arrival of paddy in key producing regions had pushed prices down to Rs 52 per kg by February. However, rising demand in March nudged prices up to Rs 58 per kg, still below their September highs. 'The current rise is purely market-driven and has no correlation with the political situation,' Sethia added. India exported approximately 6 million tonnes of Basmati rice in FY 2024–25, while Pakistan accounted for around 1 million tonnes. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
