Title: The Impact of US Tariffs on India’s Shrimp Exports: Economic, Industrial, and Strategic Implications
Abstract
This paper examines the effects of a 58.26% US tariff on Indian shrimp, imposed as a penalty for Russian oil purchases, on India’s seafood export sector. As India is the second-largest shrimp producer globally and the US its largest market, the tariff has disrupted a trade relationship critical to India’s economy. This study analyzes the economic repercussions, adaptive strategies by Indian exporters, and challenges in diversifying markets. Drawing on industry data, stakeholder interviews, and policy trends, the paper highlights the vulnerability of export-dependent industries to geopolitical tensions and the need for resilient trade diversification strategies.
- Introduction
India’s shrimp industry, a cornerstone of its marine exports, has faced unprecedented challenges since the imposition of steep US tariffs in 2025. Shrimp constitutes 66% of India’s seafood exports, with the US historically serving as the primary destination for 60% of Andhra Pradesh’s shrimp exports and 48% of India’s total shrimp exports by value ($4.88 billion in the fiscal year ending March 2025). The imposition of a 58.26% combined tariff, including a 25% penalty for buying Russian oil, has led to a 26% decline in exports to the US in October 2025, triggering economic uncertainty for coastal communities and exporters. This paper explores the multifaceted impact of the tariffs, focusing on economic, industrial, and strategic responses, while emphasizing the sector’s future sustainability.
- Background: India-US Shrimp Trade Dynamics
India has been the world’s second-largest shrimp producer (after Ecuador) since 2000, annually producing ~1.1 million tonnes of shrimp, predominantly for export. The US, as the largest market, has historically shaped India’s shrimp industry through consumer preferences for Pacific whiteleg (vannamei) shrimp, processed to meet American standards (e.g., headless, de-veined, tail-on). This symbiotic relationship positioned India to dominate the US shrimp market, with Andhra Pradesh’s shrimp export hub in Bhimavaram epitomizing the industry’s growth. However, the 2025 tariff shock has exposed the sector’s overreliance on a single market, challenging its resilience.
- Economic Implications of the US Tariff
The effective tariff of 58.26%—comprising a 25% baseline tariff, 25% penalty, 5.77% countervailing duties, and 2.49% anti-dumping duties—has drastically reduced Indian shrimp’s competitiveness in the US. By October 2025, exports had fallen by 26% year-over-year, with Indian exporters reporting reduced capacity utilization. For instance, the Ananda Group, a 35-year-old family-run firm, slashed production from 500 tonnes per facility to just 2 tonnes during the tariff-induced slump.
The financial strain is evident in Bhimavaram, where once-bustling shrimp processing units now operate at 50% capacity, and workers face layoffs. Farmers and processors fear further losses in 2026, with Mr. Anand Kumar Uddaraju of Ananda Group stating, “The order pipeline is weak. We’ll see the real effect of the US tariff by the end of January.”
- Strategic Responses: Diversification and Value Addition
Indian exporters have sought to offset US market losses through two primary strategies: market diversification and value-added product development.
4.1 Market Diversification
Exporters are targeting Europe and China, which together accounted for 32% of 2025 exports. However, these markets present challenges. European demand is constrained by high tariffs on processed seafood and growing sustainability concerns, while China’s preference for Ecuadorian head-on shrimp and reliance on domestic production limits India’s penetration.
4.2 High-Value Products
Industry players are pivoting to premium products such as breaded or butterflied shrimp, commanding higher prices. The Shrimp Insight report (December 2025) noted a shift toward value growth over volume, but these efforts have yet to fully compensate for US market losses.
- Challenges and Future Outlook
The sector faces three key challenges:
Tariff Uncertainty: Without resolution in India-US trade negotiations, farmers and processors risk long-term revenue declines.
Market Saturation: Europe and China offer limited growth potential due to regulatory barriers and competition.
Operational Costs: Transitioning to new markets requires costly reconfiguration of production standards.
Regions like Bhimavaram may face socio-economic decline as employment in the shrimp sector wanes. Mr. Uddaraju warns, “If the US tariffs remain, 2026 will be the worst year for our industry.”
- Policy and Strategic Recommendations
To mitigate risks and ensure long-term sustainability, India must:
Diversify Trade Agreements: Pursue free-trade deals with Southeast Asia, Africa, and the Middle East.
Invest in Value Chains: Expand into ready-to-eat and farm-to-table segments to capture premium markets.
Strengthen Domestic Consumption: Use subsidies to boost local demand for shrimp.
Enhance Sustainability Practices: Address international concerns over eco-friendliness to access green markets.
- Conclusion
The 2025 US tariff crisis underscores the vulnerability of India’s shrimp industry to geopolitical shifts. While adaptive strategies like market diversification and product innovation offer partial relief, the sector’s long-term health hinges on reducing dependence on a single market and adopting sustainable, diversified trade policies. Without proactive measures, India risks losing its dominant position in global shrimp trade, with cascading effects on coastal economies.
References
Shrimp Insight Report, December 2025.
Anand Kumar Uddaraju, Ananda Group, interview, January 2026.
India’s Ministry of Commerce, Export Data FY 2024–2025.
US Trade Representative, Tariff Imposition Notice (May 2025).