Trump’s Tariff Threat on Indian Rice Sparks Market Sell-Off

Indian rice-exporting companies witnessed sharp declines on Dalal Street after US President Donald Trump warned of potential new tariffs on Indian rice imports. His remarks, made during an event announcing relief measures for American farmers, intensified trade tensions and triggered immediate volatility in rice-related stocks.

Market Reaction to Tariff Concerns

Kohinoor Foods saw the steepest fall, dropping nearly 10% to a 52-week low before staging a partial recovery. LT Foods and KRBL also declined sharply, while Chaman Lal Setia Exports slipped but later trimmed losses. Investors responded to fears that fresh US duties could weaken export competitiveness and disrupt trade flows.

Trump’s Accusations of Rice Dumping

Trump stated that India, along with Vietnam and Thailand, was “dumping” low-priced rice in the US, allegedly harming domestic growers. His comments emerged amid political pressure from the American farming community ahead of midterm elections. He also hinted that tariffs may extend to Canadian fertiliser imports, further raising uncertainty in the agriculture supply chain.

Wider Trade Context and Existing Tariffs

Washington had already imposed a 50% tariff on Indian goods in August, citing geopolitical concerns linked to India’s energy imports. With a US delegation expected to visit India, analysts believe prospects for tariff rollback remain slim. Additional duties may heighten trade tensions at a time when multiple commodities are under review in Washington.

Exam Oriented Facts

• Indian rice stocks fell after Trump warned of new tariffs on imports.
• Kohinoor Foods dropped nearly 10% before partial recovery.
• Trump accused India of rice “dumping” in the US market.
• US had already imposed a 50% tariff on Indian goods earlier in 2025.

Outlook for Exporters and Consumers

Trade analysts suggest that even if duties rise, the overall impact on Indian exporters may be cushioned by strong demand in other global markets. However, higher tariffs could increase prices for US consumers who rely on Indian rice varieties. With policy signals from Washington remaining unpredictable, investors will closely monitor developments that may shape agricultural trade in the coming weeks.