Rice Market: India Narrowly Dodges Retaliatory Duties on Brown Basmati

    Photo courtesy of US Rice Producers Association

    The U.S. Trade Representative (USTR) announced a deal with India to avoid the imposition of new Section 301 retaliatory tariffs that would have otherwise been implemented yesterday. In June, USTR set a 180-day suspension of potential tariffs against India for digital services taxes they impose on U.S. companies.

    As part of the planned U.S. retaliation, brown basmati imports from India were set to have an additional 25 percent duty tacked onto their existing import tariffs.

    USTR Ambassador Katherine Tai traveled to India last week to meet with her counterpart to discuss bilateral issues, including changes to their digital services taxes. Following discussions, a reciprocal agreement was reached on November 25, just four days prior to the U.S.-established deadline.

    Unfortunately, USTR did not report discussion of any of India’s egregious World Trade Organization-violating domestic support programs. USA Rice submitted comments to USTR in April in support of imposing retaliatory duties against all rice imports from India because of their excessive rice production subsidies that distort the world rice market.

    “During the last decade, rice imports to the U.S. have grown significantly, primarily due to major world exporters, India, and Thailand. From India alone, the world’s largest rice exporter, imports jumped 159 percent from 2011 to 2020,” said Bobby Hanks, a Louisiana rice miller and chair of USA Rice who also chairs the USA Rice International Trade Committee that submitted the comments on behalf of the organization.

    “During that same period, the value of rice imports from India more than doubled from $125 million to $283 million, annually.”

    USA Rice’s efforts to push back against India’s subsidies won’t stop with this.

    “We need to keep an eye on what our competitors are doing policy-wise…but we also need to have the Biden Administration take a case at the WTO against India,” said Dow Brantley, Arkansas rice farmer and vice chair of the USA Rice international Trade Policy Committee.

    In addition to avoiding penalties against imports from India as a result of digital services taxes, the U.S. also made similar agreements with the other five countries involved in the Section 301 investigation over the last six months.

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