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An additional penalty of 25% was added on India’s oil purchase from Russia.
Updated: August 9, 2025 5:15 PM IST
New Delhi: The decision of US President Donald Trump to impose a tariff of 50% on exports from India, especially on Indian Basmati rice, is going to affect not only the economies of both countries but also have an impact on the global economy.
Indian traders, especially Basmati farmers and exporters of Punjab and Haryana, are very much worried and uncertain, hoping that the government will help them come out of this mess. Moreover, this decision has been taken at a time when prices are already falling, and uncertainty has increased in the market.
When did the USA impose the tariff on India?
America imposed the tariff on August 7 after Trump’s executive order, in which an additional penalty of 25% was added on India’s purchase of oil from Russia and with the already applicable 25% reciprocal tariff, the total tariff became 50%. This 50% tariff will be applicable from August 28.
Why is it an advantage for Pakistan?
The imposition of a 50% tariff on India will work in Pakistan’s favour, as it has given Pakistan a big lead over India in the American market. This is because only a 19% tariff has been imposed on Pakistan. These two different tariff rates, i.e., 19% and 50% will give Pakistan a huge margin of 31% in Basmati exports as Indian Basmati rice will cost 31% more to the American customers.
What do Indian traders say?
“Pakistani traders have already started taking orders from America, but Indian traders are not even able to negotiate due to the price difference,” said Vice-President of Basmati Exporters Association Ranjit Singh Josan as quoted by a report in the Hindustan Times. Josan added that this is causing a loss to India and benefiting Pakistan.
What is the biggest fear of Indian farmers?
The tariff has been imposed at a time when the prices of famous varieties like 1121 and 1509 have already fallen from Rs 4,500 per quintal to Rs 3,500-Rs 3,600. Now there is a fear that the prices may reach Rs 3,000. In such a situation, the tariff is a double blow.
“If this situation continues, farmers will leave Basmati and go back to ordinary rice,” said Gurbakshish Singh, a farmer from Tarn Taran in Punjab, as reported by news18.
Price difference between Indian and Pakistani Basmati rice in the USA?
One ton of Basmati rice bought in the USA for $1,200 will cost an additional $600 if imported from India, while importing it from Pakistan will cost only $228 extra. Mill owners are not able to sell their old stock.