The Indian shrimp industry is currently facing a significant crisis after the United States announced a 26 percent tariff on shrimp imports from India, effective July 2025. The move, implemented under President Donald Trump’s renewed trade policies, poses a serious threat to India’s $7 billion seafood export sector, which relies heavily on the US market.

Exporters across India, particularly in the state of Andhra Pradesh, have already begun to feel the impact. With the steep tariff making Indian shrimp more expensive in the US market, buyers are pulling back or renegotiating contracts. Exporters are being forced to reduce offer prices, and thousands of shipping containers with shrimp stock are at risk of being left unsold. This disruption is also affecting shrimp farmers, with many reconsidering their cultivation plans for the year due to the anticipated drop in demand.

Approximately 300,000 farmers connected to the shrimp farming industry now face uncertainty about their livelihoods. Many have invested heavily in stocking their ponds and preparing for the harvest season, only to find the market collapsing beneath their feet. The price shock has also extended to regional markets, including Kerala, where shrimp prices have plunged from around $9 to $5 per kilogram. The drop has affected both the American and European markets. In Kerala, the export of Poovalan shrimp has nearly halted, and many are being forced to sell their produce in local markets at extremely low prices, sometimes as little as ₹40 or ₹45 per kilogram.

The United States remains India’s largest shrimp export market, accounting for nearly 40 percent of the total seafood export volume. However, with the new tariffs in place, countries such as Ecuador, Indonesia, and Vietnam may fill the gap. Ecuador, in particular, is well-positioned with a lower tariff rate of 10 percent and geographical proximity to the US. While Ecuador lacks the capacity to fully replace India's output, it is still expected to benefit from the policy shift.

In response, Indian exporters are now seeking to diversify their markets. Firms such as Coastal Corporation have already begun expanding their reach into countries like China, Russia, and Canada. However, this transition will take time, and many smaller exporters may not have the resources to make such a shift quickly.

The Indian government and industry stakeholders are not staying silent. The Seafood Exporters Association of India (SEAI) and the Marine Products Export Development Authority (MPEDA) are actively challenging the US allegations that Indian shrimp exports are unfairly subsidized. The US decision was based on findings that Indian exporters benefited from government schemes such as RoDTEP, which the US claims amount to trade subsidies. Indian officials argue that these schemes are compliant with World Trade Organization regulations and are merely designed to refund domestic taxes and costs borne by exporters.

Efforts are ongoing to present data and arguments to US authorities in the hopes of reversing or reducing the tariffs. In the meantime, the industry is bracing for a turbulent year ahead, with livelihoods, investments, and the country’s reputation as a global seafood leader hanging in the balance.