Garg outlined why this situation could turn into a blessing in disguise, pointing to several key factors: the depreciated rupee...
India’s Rice Industry and the Impact of U.S. Tariffs: A Blessing in Disguise, Says Dev Garg
The Impact of U.S. Tariffs on India’s Rice Industry, Dev Garg Latest news: The tariffs imposed by the U.S. government are a concerning development, but they may also turn out to be a "blessing in disguise," according to Dev Garg, Vice President of the Indian Rice Exporters Federation (IREF) and Director of Shri Lal Mahal Group.
Speaking to ANI, Dev Garg said, “The tariffs imposed by the U.S. government is a concerning situation. We will not deny that because the U.S. is a major market for India.”
Last year, India exported about Rs 3,100 crores worth of Basmati and non-Basmati rice to the U.S. market. Garg added that, in the current fiscal year, only Rs 833 crores worth of exports have taken place so far.
“That means there is still a lot of gap to be covered. But the situation is concerning. However, this may be a blessing in disguise.”
He highlighted Pakistan and Thailand as India’s two major competitors in the U.S. rice market. Thailand holds about 40% of the market share, while Pakistan holds about 12%. India's market share is around 30%.
“Given the fact that the tariffs imposed on Thailand and Pakistan stand at 19% and the tariffs imposed on India is 25%, there is a gap of 6%,” he continued.
Garg outlined why this situation could turn into a blessing in disguise, pointing to several key factors: the depreciated rupee, surplus rice stocks, and the expected fall in rice prices.
Despite the fact that there is a gap of 6%, he said, "if we look at the fundamentals of the Indian economy, today we are looking at a situation where the rupee has depreciated around Rs 88 to a dollar. We are staring at a situation where we have record surplus stocks in our country and in the coming season, it is a high expectation that there will be deflation on prices.”
“So, this gap of 6% vis-à-vis our competitors is not a very significant gap. If all these situations are right and the Indian market holds its expectations with respect to the deflationary trend of prices, it is expected that we will even surpass last year's figures of Rs 3,100 crores of export. This year, we might export more than 250,000 MT of rice to the U.S. market.”
He further added, “So, this situation is concerning but this is a blessing in disguise as this will help us narrow the gap between our competitor nations who do not have the fundamental advantages that our economy does."
Earlier this week, the U.S. President Donald imposed a tariff rate of 25% on Indian imports, along with a penalty for purchasing energy and the “vast majority” of military equipment from Russia, starting August 1. In a post following the tariff announcement, in his harshest remark made against India yet, he called India’s economy “dead,” adding that he does not care what India does with Russia.
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