Just hours before a US delegation arrived in New Delhi to wrap up a long-pending trade deal, Donald Trump hinted at a fresh tariff to be levied on India. Speaking at the White House, the US President expressed his displeasure over Indian rice shipments to the US after complaints from a local farmer lobby over cheap imports.
Trump said he would “take care” of what he alleged was the dumping of rice in the US by India and other countries, but did not mention what barrier he had in mind.
As of now, Indian rice faces a 50% tariff, but basmati exports to the US have reportedly held up, thanks to relatively inelastic demand. The volumes shipped are also modest, so an add-on levy may not be much of a blow. But if the US goes ahead, the signal sent would be distressing.
Perhaps India should remind US negotiators that dumping refers to something being sold in another market at a price below its cost of production. With subsidies counted, Indian farmers cultivate paddy more cheaply than US farms do.
Also, our rice exporters seek US consumers for the premium they pay, not because we have excess harvests to be offloaded. Farm lobbies may matter in politics, but the truth must still prevail.