Indian Seafood Exporters Brace For Impact From Trump’s Reciprocal Tariffs

Ecuador, another major shrimp-exporting country, faces only a 10 per cent levy, significantly lower than the rates imposed on Asian exporters.

Indian exporters, who typically operate on narrow profit margins of 4-5 per cent, are now expected to absorb an additional burden of 16 per cent due to the tariffs.

Source : Freepik

The recent announcement of reciprocal tariffs by the United States has cast a shadow over India’s thriving seafood exports, especially shrimp shipments that dominate trade with the American market. With export figures to the US touching $2.5 billion in the financial year 2023-24, industry stakeholders are bracing for significant disruptions.

According to G Pawan Kumar, President of the Seafood Exporters Association of India (SEAI), shrimps comprise 92 per cent of total seafood exports to the US. India currently holds the distinction of being the top shrimp supplier to the American market, reported PTI. However, Kumar warned that the newly imposed tariffs would affect every link in the supply chain. “This tariff will hurt all stakeholders in the value chain and cause all round distress,” he told PTI.

Competitive Edge May Shift to Ecuador

The comparative tariff scenario doesn’t favour India. Ecuador, another major shrimp-exporting country, faces only a 10 per cent levy, significantly lower than the rates imposed on Asian exporters. Kumar pointed out that exporters from Vietnam and Indonesia are subject to tariffs of 46 per cent and 32 per cent respectively, potentially giving Ecuador a stronger foothold in the US market. “Ecuador is likely to replace India as the largest shrimp supplier to the US market,” he stated.

Indian exporters, who typically operate on narrow profit margins of 4-5 per cent, are now expected to absorb an additional burden of 16 per cent due to the tariffs. “It will be difficult for Indian seafood exporters to absorb this margin of 16 per cent and compete with produce from Ecuador,” he added.

The new tariffs are scheduled to take effect from April 9, at a time when around 2,000 containers are already en route to the US. Kumar estimated that the financial blow to exporters could touch Rs 600 crore, with a similar number of containers still held in cold storage awaiting dispatch. Since most exports are delivered on a ‘doorstep’ basis, the exporters will be directly liable for the additional duties.

Concerns Beyond Tariffs

In addition to the reciprocal tariffs, US trade policy includes a 5.77 per cent countervailing duty and a 1.38 per cent anti-dumping duty on shrimp imports. These levies have collectively tightened the already squeezed profit margins for Indian seafood businesses. “This levy has come just before the start of the first season of the culture of shrimps,” Kumar noted, expressing concern that the prevailing uncertainty may reduce order volumes from farmers and hatcheries alike.

The SEAI  urged the central government to intervene with timely relief measures until tariffs are reduced or a bilateral trade deal is established. Meanwhile, Andhra Pradesh, which plays a pivotal role in India’s aquaculture sector with over 5.7 lakh acres under cultivation, is exploring ways to soften the blow. State Fisheries Department Joint Director Lal Mohammed said that consultations are being planned to help the sector adapt. The Vannamei shrimp variety, cultivated across more than 2.5 lakh acres in the state, is particularly at risk.