Indian shrimp exporters are currently facing their toughest challenge yet, with a 50% tariff imposed by the US and a potential additional anti-dumping duty of up to 40%. This comes as the U.S. accounts for over a third of India’s total shrimp exports. The combined tariffs make Indian exports “too pricey and uncompetitive” in the US market, leading to a halt in orders and an estimated 15-18% drop in exports to the US in the current fiscal year, according to Crisil Ratings. This situation is also significantly impacting the 14-16 million people dependent on the sector, with many farmers in Andhra Pradesh, which accounts for over 70% of India’s shrimp cultivation, considering exiting the business.
To mitigate the crisis, the sector has turned to market diversification, and China has emerged as a major lifeline. Once a secondary market for Indian shrimp, China is now a top destination due to its strong domestic demand and significant seafood processing and re-export industry. Chinese buyers have been offering forward contracts, providing a much-needed outlet for Indian exporters. According to one industry expert, this tariff shock has been a “blessing in disguise” as it has forced the industry to reduce its over-reliance on the US market and actively seek new buyers in China, Europe, and other Asian markets.
The situation has created an opportunity for India’s competitors. Ecuador, with a tariff of just 15%, is emerging as a major beneficiary, along with Vietnam and Thailand, which face tariffs of less than 30%. These countries also have a geographical advantage due to their closer proximity to the US. Exporters in Ecuador are closely monitoring the trade talks between India and the US, with plans to expand their capacity to feed the US market if the high tariffs on Indian shrimp remain.