India-U.S. Interim Trade Pact Set for April
An interim trade pact between India and the United States is expected to be operational in April. The deal is likely to ease the entry of Indian agri-food exports into the American market, signaling India's intent to deepen its global market penetration and increase competition in commodity and premium food segments.
- The new 18% U.S. tariff on Indian goods brings India to a more level playing field with Thailand, which faces tariffs of around 19%. Previously, some Indian rice exports to the U.S. faced duties as high as 50%. Despite these high tariffs, India's rice exports to the U.S. grew, indicating strong demand for Indian varieties like basmati. - A member of the Indian Rice Exporters Federation has already secured a deal to supply 5,000 tonnes of basmati rice to a U.S. buyer following the new trade pact. This signals India's intent to increase its footprint in the premium U.S. rice market. - Vietnam is strategically shifting its focus from volume to quality, aiming to increase the export of high-value and aromatic rice varieties like ST25. The country is leveraging free trade agreements such as the EVFTA with Europe and the RCEP in Asia to gain market access and command higher prices. - The global market for organic rice is projected to see robust growth, driven by health-conscious consumers in Europe and North America. This trend, coupled with a growing focus on sustainability, presents an opportunity for exporters with certifications like the Sustainable Rice Platform (SRP), which is gaining traction with major retailers. - The European Union is tightening its food import regulations, with new comprehensive traceability rules taking effect in 2026 that require detailed supply chain records from farm to fork. The EU has also established a task force to reinforce food safety controls, with a 50% increase in audits on non-EU countries planned for 2026-2027. - The Thai baht is forecasted to trade in a range of 30 to 32 against the U.S. dollar through 2026. As of mid-February 2026, the baht was trading around 31 per dollar, near its strongest level since March 2021. - Southeast Asia's economic growth is expected to be strong in 2026, with GDP growth forecasts of 5.1% for Indonesia and 4.5% for Malaysia. This growth, coupled with easing inflation pressures across the region, is expected to support consumer demand and investment. - While the India-U.S. deal reduces tariffs, it also includes provisions for India to address non-tariff barriers and review whether U.S. or international standards are acceptable for agricultural imports. However, the Indian government has stated that sensitive products like rice, wheat, and dairy are protected from tariff reductions on imports into India.
