Tensions between the United States and India are escalating as President-elect Donald Trump signals a crackdown on Indian rice exports. While the Trump administration cites economic “dumping” as the primary concern, experts suggest the hostility is rooted less in economics and more in diplomatic ego, specifically India’s refusal to engage in the political flattery that has spared nations like Pakistan.
The Rice “Dumping” Allegation: Politics Over Economics?
When a reporter recently questioned Trump about rice dumping in the U.S. by multiple countries, he immediately singled out India once again—revealing his lingering personal grudges against New Delhi.
Donald Trump has renewed his aggressive stance on trade, recently questioning on why India is permitted to “dump” rice into the U.S. market. In a recent interaction with key advisor Scott Bessent, Trump specifically singled out India among other nations, asking, “Why is India doing it?” and suggesting that these imports must be stopped.
The move appears to be a calculated domestic play. With approval ratings facing challenges, Trump is keen to secure the loyalty of American farmers—a core voter base. By threatening to block Indian agricultural products, he aims to funnel demand toward U.S. growers, positioning the tariffs as a protective measure for the American rural economy.
The Russia Double Standard: Why Hungary Gets an Exemption
A prevailing theory suggests that the U.S. is punishing India for its continued purchase of Russian oil and the recent visit of Vladimir Putin to India. However, former RBI Governor Raghuram Rajan argues that this narrative is flawed.
The U.S. has demonstrated a clear double standard regarding Russian sanctions. Hungary, a European nation led by Prime Minister Viktor Orbán, continues to purchase fuel and other goods from Russia. Yet, instead of facing tariffs, Trump has explicitly granted waivers and exemptions to Hungary for these purchases. This discrepancy confirms that purchasing from Russia is not the primary driver of Washington’s hostility toward New Delhi.
The ‘Flattery’ Factor: The Nobel Peace Prize & Pakistan
According to analysts, the disparity in trade treatment is largely personality-driven. The specific friction point dates back to Trump’s previous term and his desire for international validation.
Raghuram Rajan highlights that the tariff gap between India and its neighbors is stark: India currently faces tariffs as high as 50%, making it the “most tariffed country on the planet,” while Pakistan faces only 19%.
The reason for this favorable treatment toward Pakistan is reportedly rooted in flattery. When Trump claimed credit for mediating and stopping a potential war between India and Pakistan, Islamabad validated his narrative, supporting the idea that Trump deserved a Nobel Peace Prize for his intervention.
In contrast, India maintained its diplomatic dignity. New Delhi insisted that the de-escalation was a bilateral achievement reached without U.S. mediation. Because India refused to stroke the President’s ego or support his Nobel nomination narrative, the administration has taken a punitive stance on trade.
Global Impact and India’s Resilience
Despite the looming threat, India remains the world’s largest rice exporter, supplying over 40 countries. While Indian Basmati rice is gaining traction in the U.S., America is not India’s primary market; the bulk of exports flow to the Middle East, including Saudi Arabia, Iran, and Iraq.
Experts note that even if the U.S. imposes prohibitive tariffs, India is already pivoting to explore markets in the Philippines and Africa. However, the aggression from Washington has cast a shadow over the much-anticipated India-U.S. trade deal. Initially projected for late 2025, the likelihood of finalizing such a deal is now in question as the U.S. continues to target Indian agriculture while exempting other nations based on political allegiance rather than economic fairness.