With Trump's Reciprocal Tariffs Ahead, Indian Shrimp Exporters Caution 'Its Game Over'

Exporters have slashed offer prices by 10 per cent in response to the looming tariffs, leading to plummeting demand from buyers overseas. Shrimp farmers are caught in the crosshairs of a trade battle.

Shrimp accounted for a major share of Indian seafood exports, with Andhra Pradesh alone contributing 92 per cent of the country’s $2.5 billion shrimp exports to the US.

Source : Freepik

The US administration's decision to impose a steep 26 per cent tariff on Indian shrimp exports starting July has sent ripples through a $7 billion industry that relies heavily on American buyers like Walmart and Kroger.

Already, the industry is feeling the squeeze, reported Reuters. Exporters have slashed offer prices by 10 per cent in response to the looming tariffs, leading to plummeting demand from buyers overseas. Farmers are struggling to break even amid rising input costs for feed and pond rentals. Shrimp farmers are caught in the crosshairs of an escalating trade battle.

Ecuador Could Gain From India's Loss

While Indian shrimp containers—about 2,000 of them—face uncertainty, Ecuador stands to benefit from a more favourable 10 per cent tariff and its geographical proximity to the US. The South American country, which exported $1.55 billion worth of shrimp in 2024, could capture part of India’s share in the American market.

However, Ecuador’s aquaculture leaders caution against overconfidence. “India will be obliged to look for other markets where Ecuador is selling, like China and the European Union, so we’ll have more pressure in other markets,” said Jose Antonio Camposano, president of Ecuador’s National Chamber of Aquaculture.

India exported $7.3 billion worth of seafood last year, a record 1.8 million metric tonnes in volume. Shrimp accounted for a major share, with Andhra Pradesh alone contributing 92 per cent of the country’s $2.5 billion shrimp exports to the US.

Exporters Sound the Alarm on Margins

Inside Indian processing units, shrimp are cleaned, sorted, manually inspected, and quick-frozen before beginning a 40-day journey to US ports like New York, Houston, and Miami. But this supply chain now stands disrupted. “Ten per cent is high, we exporters operate on a 3 per cent to 4 per cent margin,” the report said citing G. Pawan Kumar, president of the Seafood Exporters Association of India.

For many exporters, renegotiation of pre-tariff contracts with American buyers is already underway. “It’s game over” if the 26 per cent duty kicks in, warned one exporter who fears losses on 130 containers already ready to ship.

Despite the uncertainty, retailers like Walmart remain cautiously optimistic. “We have built long-lasting and deep relations with suppliers over the years. We expect that to continue, going forward, ” said Latriece Watkins, chief merchandising officer at Walmart US.