April 22, 2025

Tariffs threaten export potential of Indian shrimp to US

 

 

India's shrimp industry is facing a 26% tariff from the United States, threatening a thriving US$7-billion seafood export market that relies heavily on US supermarket chains such as Walmart and Kroger.

 

"India's seafood exports hit a record high in FY24, reaching 1,782,602 metric tons valued at $7.38 billion," said IPR Mohan Raju, president of the Prawn Farmers Federation of India, to local media. "Frozen shrimp remained the top export item, accounting for $4.88 billion. The US was the leading market, importing 297,571 metric tons."

 

In response to the potential US tariffs, Indian shrimp farmers are urging the government to eliminate import duties on essential aquaculture inputs such as shrimp broodstock and hatchery feeds.

 

The Prawn Farmers Federation of India noted that nearly all the broodstock used in Indian shrimp farming is imported from the US, along with substantial amounts of hatchery feeds, premixes, and Artemia. Removing these duties, they argue, would show India's commitment to fair trade and could lay the groundwork for reciprocal actions from the US.

 

Raju emphasised that the proposed 26% reciprocal tariff—combined with the existing anti-dumping duty of 3.88% and a countervailing duty of 5.77%—poses a serious threat to the industry. Farmers across India are already operating with minimal or no margins. Over 90% of them are small-scale or marginal farmers. Any further drop in farm-gate prices, Raju warned, would deepen the rural livelihood crisis and discourage continued shrimp production.

 

According to Reuters, demand is drying up amid the uncertainty, with exporters slashing offer prices by about 10% following news of the tariffs.

 

Although US President Donald Trump has delayed the 26% rate until July, the current 10% rate has already made exporters wary.

 

Exporters are especially concerned about Ecuador gaining a competitive advantage from Trump's proposed 10% tariff rate for the South American country, which is geographically much closer to the US—its second-largest shrimp market. Still, Ecuadorean producers, who shipped $1.55 billion worth of shrimp in 2024, are not overly optimistic.

 

"Ten percent is a big hit—we operate on margins of just 3% to 4%," said Kumar, president of the Seafood Exporters Association of India. The group is pushing for the government to secure exemptions for the shrimp industry during ongoing trade talks with the US.

 

Industry leaders have joined a state government panel tasked with assessing the impact of the tariffs and exploring new export markets, including China. Moreover, media reports said India is among the first nations to initiate talks with the US over a trade deal.

 

- Aquafeed.com