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Trump's tariff is a disaster for Indian farmers, but a joy for Pakistan; Know how it will fill the treasury of the neighboring country

  US President Donald Trump has imposed an additional tariff of 25% on Indian basmati rice, on top of the already imposed 25% reciprocal tariff. Due to which the total tax has now reached 50%.

Due to this decision, Indian basmati rice will become expensive in the US and Pakistan will benefit from it, as only 19% tariff is levied on basmati coming from there.

The total demand for basmati rice in the US market is about 5 lakh metric tonnes, out of which India exports 3 lakh metric tonnes (worth about $350 million). Whereas, Pakistan sends 1.8 metric tonnes.

What will be the cost of the new tax?
Currently, the average price of Indian basmati is $1200 per metric tonne. However, after the new tax, it will go up to $1800, while Pakistani basmati will be available at $1450 per tonne.

Punjab is India's largest basmati rice producing state, contributing 40% of the total production. It is followed by Haryana and other states. In the financial year 2023-24, India exported 59.42 lakh metric tonnes, of which the US share was about 3 lakh metric tonnes. The new tariffs could reduce India's US market share by 50% to 80%.

How much basmati is cultivated in Punjab?
Basmati cultivation in Punjab has declined from 7.63 lakh hectares in 2015-16 to 6.39 lakh hectares in 2024-25. Last year, the price of basmati was Rs.4500 per quintal, which has come down to Rs 3500-3600. If the situation remains bad, it could fall further to Rs 3000.

Which states will affect farmers? Exporters say that due to reduced demand in the US, procurement prices will fall in Punjab, Haryana and western UP. This will directly impact farmers' income. The price in the local wholesale market has also come down from Rs 71 per kg to Rs 62 per kg. The retail price may also come down.
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