US tariffs on Indian rice boost Pakistan’s exports

Pakistan’s basmati rice exports have seen strong growth in the 2023–24 fiscal year, both in volume and value, according to the Rice Exporters Association of Pakistan (REAP).

Record Growth in Exports

During FY24, Pakistan exported 772,725 tonnes of basmati rice, earning $876.9 million. This marks a significant increase from the 595,120 tonnes valued at $650.4 million in FY23.

The average export price per tonne also rose from $1,092.93 to $1,134.86, reflecting robust demand in international markets.

Top Global Markets for Pakistani Basmati

Data from Volza’s Global Trade platform for the period November 2023 to October 2024 shows:

• United States – 24% of total Pakistani basmati exports (1,519 shipments)

• Italy – 14% share (908 shipments)

• United Kingdom – 11% share (716 shipments)

This strong US demand comes despite the country’s increased reliance on rice imports over the last three decades. According to the US Department of Agriculture (USDA), imported rice’s share of the US domestic market has risen from 7% in 1993–94 to over 25% by 2022–23, with over 60% of imports being aromatic Asian varieties—including basmati from Pakistan and India, and jasmine from Thailand.

US Tariffs Give Pakistan a Competitive Edge

Trade tensions between the United States and India have worked in Pakistan’s favor. As part of its punitive trade measures against India over its energy and trade ties with Russia, the US imposed wide-ranging tariffs on Indian products—including electronics, medicines, and basmati rice.

While several Indian industries later received exemptions, Indian basmati rice remains subject to a 50% tariff in the US market. In contrast, Pakistani basmati faces only a 19% tax, giving it a significant price advantage for American buyers.

Industry Outlook

Analysts believe Pakistan’s basmati rice sector could continue its upward trajectory if it maintains quality standards and capitalizes on favorable trade conditions in the US and Europe. However, they also warn that geopolitical changes or domestic production challenges could impact future growth.