US-bound shrimp shipments from India face unprecedented obstacles, with a projected decrease in volumes by 7-9%
In a significant development, Indian shrimp exporters are facing unprecedented challenges in the US market, contributing to nearly 48% of their exports. This is due to a new 25% tariff imposed by the US government, effective August 7, 2025, along with additional financial penalties and existing anti-dumping duties [1][4].
The US tariffs, which are among the highest for major shrimp exporters, are causing an estimated impact of a 7-9% hit on exports in FY26 and a 50-100 basis points reduction in operating margins due to higher costs and competitive pressure [1][4]. This tariff disparity puts Indian exporters at a competitive disadvantage, as US importers may shift their sourcing preference towards Ecuador, the world’s largest shrimp exporter and a strong competitor in the US market, which faces a much lower tariff rate of around 10% plus countervailing duties of 3-4% [1][2].
The government's Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme aims to enhance production, productivity, exports, and address key gaps, including reducing post-harvest losses in various components of the value chain [5]. Under this scheme, the government has allocated Rs 3,490 crore in the last five years from 2020-21 to 2024-25 [3]. The government has sanctioned projects for modernizing and upgrading fishing harbors at Visakhapatnam, Chennai, Paradip, Cochin, and Mumbai Port under PMMSY, with a total cost of Rs 651.14 crore [4]. However, it seems that the focus of the PMMSY scheme is more on production and processing, rather than ports [6].
The PMMSY scheme also provides financial assistance for the construction of fishing harbors, fish landing centers, and the modernization/upgradation of existing fishing harbors [3]. Additionally, the maintenance dredging of fishing harbors is also covered under the PMMSY scheme [5]. These initiatives are aimed at sustainable investment in infrastructure to strengthen the export value chain.
During the financial year 2023-24, India exported an all-time high volume of 17,81,602 MT of seafood worth Rs. 60,523.89 crore [2]. Despite this, the potential shrimp export volume could fall 7-9% in the current fiscal year due to these tariffs [1]. The credit profiles of shrimp exporters are expected to face further challenges due to these tariffs, potentially affecting their overall market position [1][3].
Large Indian exporters with long-term contracts might weather the tariffs better, but smaller exporters are expected to struggle or even exit the US market [2]. Many Indian exporters have paused shipments and deal closures to the US, awaiting official government communications and potential negotiation outcomes, with hopes for a tariff reduction from the initial 25% proposed [2].
The Marine Products Export Development Authority (MPEDA), a statutory body under the Ministry of Commerce and Industry that promotes and regulates the export of marine products, is yet to comment on these developments.
References: 1. The Economic Times 2. Livemint 3. PTI 4. The Hindu 5. Ministry of Fisheries, Animal Husbandry and Dairying 6. Business Standard
- The US tariffs on shrimp imports from India, poised at 25%, may lead to a 7-9% decline in India's shrimp exports in the upcoming fiscal year, according to various news sources [1].
- The commercial disadvantage caused by these tariffs might prompt US importers to favor Ecuador, a major shrimp exporter with a lower tariff rate of around 10% [1].
- To counter these challenges and sustain the export value chain, financial assistance for fishing harbor construction, modernization, and maintenance, as outlined in the Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme, may be critical [3, 5].
