Shrimp farmers reeling under US tariffs need a lifeline

This sector's competitiveness in the US market will be hit hard but India could offer a clutch of relief measures

- RAYA DAS & SANCHIT GUPTA

The recent move by the US to impose a 25% basic tariff on shrimp imports from India has triggered uncertainties for the sector back home. This comes on top of existing anti-dumping and countervailing duties of approximately 8% on shrimp, pushing the total effective duty to 33%, which was just 7.5% before US President Donald Trump's reciprocal tariff announcements of 2 April.

In recent years, Indian shrimp farming has shown an impressive performance. It grew at a compound annual growth rate of 18% between 2011 and 2023. This growth relied heavily on exports. Demand from the US has been a major driver of this increase.

Consider the numbers. In 2023-24, India exported over $2.5 billion worth of shrimp to the US, making up nearly 38% of America's total shrimp imports, followed by Ecuador's share of 21%, Indonesia's 17% and Vietnam's 11% (ITC data, 2024).

However, major competitors of India in the US shrimp market have secured far more favourable terms in terms of import tariffs. Ecuador currently faces an effective duty of 18%, Indonesia's rate has dropped from 35% to 25.3% and Vietnam's has been reduced from a steep 46% to 20% following recent negotiations by these countries with the US.

In contrast, India now faces an effective tariff of 33%, creating a 14 to 15 percentage point disadvantage compared to Ecuador, its closest competitor in US market. The widened tariff gap risks diminishing India's competitive edge and reducing its market share in the US, which would put pressure on Indian exporters, processors and farmers.