India’s shrimp industry, a critical component of the country’s seafood exports, finds itself in turbulent waters as it grapples with impending tariffs imposed by the United States. The U.S. market is the largest export market for Indian seafood. Last year, it produced an astounding $2.5 billion in exports, largely fueled by shrimp exports.
A 26 percent tariff, set to go into effect in July, is the real industry-killing villain. This would be devastating for the 300,000 farming families in Andhra Pradesh that grow 92 percent of India’s seafood exports. This southern coastal state has a booming commercial shrimp farming industry. Major U.S. supermarket retailers, including Walmart and Kroger, are extremely dependent on these operations.
Indian exporters are already under pressure from the current 10 percent tariff. This burden has discouraged many from further pursuing what has become an intense competitive space. Ecuador’s shrimp industry enjoys a lower tariff rate of 10 percent and stands to benefit from India’s struggles. Ecuador’s largest export after oil is shrimp. Even with the advantage of a lower tariff rate, Ecuadorian producers remain wary of their prospects in this new market.
The Seafood Exporters Association of India (SEAI), led by dynamic President G. Pawan Kumar, is on an aggressive offensive with the Indian government. They’re looking for exemptions in the unending trade talks with the U.S. Kumar emphasized the precarious situation of exporters, stating, “Ten percent is high; we exporters operate on a three to four percent margin.”
S. V. L. Pathi Raju, a prominent player in the industry, expressed his concerns about the impending tariffs: “We are suffering huge losses. We don’t know who can resolve our price issues.” The lack of clarity around the tariffs have forced exporters to forecast worst-case scenarios for the industry. One exporter remarked anonymously, “It’s game over for the Indian industry if the tariff rate of 26 percent takes effect in July.”
Shrimp is hugely important to India’s seafood exports, and offers an essential lifeline income to thousands of farmers and exporters in Andhra Pradesh. The potential fallout from these tariffs represents grave dangers for this vital industry. Many in the industry are continuing to face unknown and challenging times. Stakeholders are calling for a significant government intervention that would provide a lifeline to mitigate the financial blow.
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