In short
In February 2026, the interim deal between the United States and India cut the US tariff on Indian goods, rice included, from 50% to 18%.
With preferential access to the US, India pushes other exporters toward alternative markets such as Africa and the Middle East, where Mercosur rice is trying to grow.
The effect is already visible: Brazil's rice export revenue fell 18% in 2025 despite higher volume, and Mercosur prices slipped to US$ 300–310 per tonne.
No measure was taken against Brazil. No barrier was raised. And yet the rules of the game changed, quietly, in February 2026.
Picture an opponent who never looks you in the eye. Who does not announce his arrival, declares no rivalry and never mentions your name in any official statement. But who, with every move on another board, takes up space that used to be yours. That is how the US–India trade deal signed in February 2026 looks to the Mercosur rice market.
The news reached the region's farm news sites without fanfare. In Washington and New Delhi, leaders celebrated a strategic rapprochement: energy, technology, industry. Agriculture came in almost in passing. But it was precisely in that "passing" that something structural shifted.
What changed, in numbers
Since 2025, the United States had applied a total tariff of 50% on Indian goods, in retaliation for New Delhi's purchases of Russian oil. The interim deal cut that levy to 18%. For rice specifically, this meant Indian rice could compete in the US market on terms much closer to those of Thailand and Pakistan.
Context: rice on the world stage
50% → 18%: cut in the US tariff on Indian rice.
~28 million t: India's export target for 2025/26.
−18%: drop in Brazil's rice export revenue in 2025, despite higher volume.
US$ 300–310: price per tonne in recent Mercosur contracts (versus US$ 360–370).
On their own, these numbers may seem cold and distant. But they tell a story with well-defined players, and Mercosur rice appears in it as an unwilling supporting actor in a change it never asked to join.
India was already a giant. Now it has a preferential passport
India did not need this deal to dominate the world rice market. It already was, and still is, the planet's largest exporter, backed by record crops, high stocks and a cost structure that lets it offer prices few countries can match.
What the deal does is subtler: it gives India a passport of preferential access to the largest Western market in the world. Indian rice, above all basmati but not only basmati, now reaches US consumers more cheaply. And that detail matters far beyond US borders.
When India gains ground in the US, other exporters do not disappear: they simply look for other destinations. And those destinations tend to be exactly where Mercosur rice is trying to grow.
The ripple effect nobody talks about
World grain trade works like communicating vessels. When a major producer wins a significant market, it does not just take that space: it pushes its competitors toward other corners of the world. Those competitors, as they redistribute, add supply to alternative markets and drive prices down there too.
Brazil had been building, with effort and logistics, a presence in niches such as broken rice for Africa and parboiled rice for the Middle East. These are markets with growing demand, reasonable margins and some competitive distance from India, or at least they were until recently.
2025
The US raises tariffs on Indian goods to 50%. India temporarily loses competitiveness in the US market. Brazil exports 1.5 million tonnes of rice, but revenue falls 18% from the previous year, a sign that prices were already giving way under Indian pressure.
February 2026
US–India interim deal. Tariffs on Indian rice fall from 50% to 18%. India recovers, and widens, its competitive edge in the US market.
Current scenario
Mercosur prices slip to US$ 300–310 per tonne. Asian and Mercosur exporters redirect their flows toward Africa and Latin America. Price pressure spreads worldwide.
Outlook
India is also moving ahead in negotiations with the European Union. Mercosur faces a growing disadvantage in preferential agreements. Access to the world market becomes costlier for those without treaties in force.
Why is it "silent"?
This may be the most important feature of the whole move: it has no declared villain and no named victim. No statement mentions Brazil. No barrier was created against Brazilian rice. Producers in Mato Grosso do Sul or Rio Grande do Sul called no crisis meeting.
And that is exactly why it is dangerous. Loud changes trigger defences. Silent, gradual, structural changes tend to be noticed late, when the market has already reorganised around a new price logic.
The impact does not come from a single crop or a single cancelled contract. It comes in contracts renewed at slightly lower margins, in the African buyer who prefers the Indian product for a few dollars less per tonne, in the exporter who has to offer a discount to close deals where he used to have the edge.
What this means for those who trade in the market
For brokers, exporters, mills and buyers working with rice in the Southern Cone, the scenario calls for a closer reading than simple swings in the exchange rate or the weather. Geopolitical variables (trade deals, preferential tariffs, strategic alliances between countries) have become as relevant as the Rio Grande do Sul harvest or the exchange rate.
Tracking the volume India exports to the US, the premiums paid in African and Middle Eastern destinations, and tariff moves in new deals (such as the one India is negotiating with the European Union) is no longer an academic exercise: it has become operating intelligence.
The world rice board is moving. Those who see the move first will have more time to reposition.
Want to understand how this scenario affects your next deal? Talk to Corretora Forgiarini: we follow the market and broker the purchase and sale of paddy rice and type 1 milled rice, in the domestic market and in rice export and import.
Frequently asked questions about the US–India deal and rice
What changed with the US–India trade deal?
The interim deal of February 2026 cut the US tariff on Indian goods from 50% to 18%. For rice, India now competes in the US on terms close to those of Thailand and Pakistan.
How does the US–India deal affect Mercosur rice?
The region is not mentioned, but it feels the indirect effect: exporters losing ground in the US redirect their sales to markets such as Africa and the Middle East, where Brazil sells broken and parboiled rice. That adds supply and pressures prices in those destinations.
Why did Brazil's rice export revenue fall in 2025?
Brazil exported about 1.5 million tonnes of rice in 2025, but revenue fell 18% from 2024, according to Abiarroz. It is a sign that prices were already giving way to Asian competition.
What should you watch in the rice market from now on?
The volume India exports to the US, premiums in African and Middle Eastern destinations, and new tariff deals, such as the one India is negotiating with the European Union.
References
All India Radio (News On Air). India-US trade deal cuts tariff on Indian exports to 18%: Piyush Goyal. 7 Feb. 2026. Available at: newsonair.gov.in
ECO. Índia e Estados Unidos anunciam consenso para um acordo comercial provisório. 7 Feb. 2026 (in Portuguese). Available at: eco.sapo.pt
CNN Brasil (Abiarroz data). Exportações de arroz crescem em volume, mas recuam em receita. 26 Jan. 2026 (in Portuguese). Available at: cnnbrasil.com.br
Safras & Mercado. À espera de exportações, preço do arroz segue caindo forte por colheita. 14 Mar. 2025 (in Portuguese). Available at: safras.com.br