Impact of Trump's Tariffs on India's Shrimp Export Industry

GANAPAVARAM, India/GUAYAQUIL, Ecuador - The Indian shrimp export sector is facing significant challenges as a result of tariffs imposed by former President Donald Trump. These tariffs, which include a proposed 26% duty scheduled to take effect in July, threaten the viability of a robust $7 billion seafood export market that primarily serves American retail giants like Walmart and Kroger. Exporters have expressed concerns that up to 2,000 containers of shrimp, already packed and ready for shipment, could be adversely affected.

In contrast, Ecuador, which is geographically closer to the U.S., stands to benefit from a lower tariff rate of 10%. The shrimp industry is crucial for Ecuador, ranking just behind oil in export value. Indian exporters are currently grappling with the implications of the tariffs, as demand from U.S. buyers begins to wane and negotiations over prices become increasingly fraught.

Farmers in Andhra Pradesh, India's leading shrimp-producing state, have reported a significant decrease in demand amidst the uncertainty created by the tariffs. S.V.L. Pathi Raju, a local shrimp farmer, highlighted the struggles faced by many in the community, stating that ongoing price issues are leading to substantial losses. Likewise, another farmer, Uppalapati Nagaraju, expressed his regret over starting shrimp cultivation just before the tariff news broke, stating he was unaware of the potential impact of tariffs on his business.

Despite Trump's decision to delay the implementation of the 26% tariff until July, the current 10% rate is already causing unease among exporters. In 2024, India's seafood exports had reached a record $7.3 billion, with shrimp accounting for a significant portion, supported by 300,000 farmers primarily from Andhra Pradesh.

Industry representatives are collaborating with state government officials to assess the tariffs' impact and explore alternative markets for shrimp exports, particularly targeting China and the European Union. However, the competitive advantage that Ecuador gains from the proposed lower tariff is a cause for concern for Indian exporters, as they fear losing market share in the U.S., which is their largest export destination.

Although Ecuadorian producers are benefiting from the tariffs, they are not overly optimistic about completely replacing India's shrimp production capabilities. Jose Antonio Camposano, president of Ecuador's National Chamber of Aquaculture, noted that while the U.S. market has driven growth in processed shrimp, Ecuador still lacks the capacity to meet the demand that India fulfills.

In Andhra Pradesh, the shrimp processing industry is under pressure, with exporters expressing anxiety over existing contracts with U.S. buyers. G. Pawan Kumar, the president of the Seafood Exporters Association of India, emphasized the threat posed by the tariffs to the profitability of the shrimp industry, particularly given the slim margins on which exporters operate. He indicated that if the 26% tariff takes effect, it could spell disaster for Indian exporters.

As the situation develops, American consumers continue to see a variety of Indian shrimp products available in stores, such as Walmart, where packs of frozen shrimp are prominently displayed. Walmart's chief merchandising officer has expressed confidence in the longstanding relationships built with suppliers, suggesting that this partnership will endure despite current challenges.