US tariffs' fallout: Andhra CM writes to Goyal on shrimp farmers' concerns

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Andhra Pradesh Chief Minister N Chandrababu Naidu late Sunday evening urged the Centre to stand by the southern state’s “aqua sector”, especially farmers engaged in shrimp cultivation and exports, which he said is set to suffer losses because of the 26 per cent reciprocal tariff that the United States has imposed on seafood exports from India.

 

In a letter to Union Minister for Commerce and Industry Piyush Goyal, the Andhra CM also suggested that India should look at signing the Free Trade Agreement (FTA) with the European Union to benefit from zero-duty access on its seafood exports to Europe, as is the case with countries like Vietnam.

 

In his letter to Goyal, Naidu appealed to the Centre “to come to the rescue of aqua farmers by negotiating with the US to exempt the aqua products from this additional duty”.

 

According to a press statement that the Andhra government issued late Sunday evening, Naidu stated in his letter to Goyal that in the 2023–24 financial year, marine food products worth $2.55 billion were exported from India to the US, of which shrimp alone accounted for 92 per cent. He pointed out that the US has imposed a duty of only 10 per cent on shrimp exporters like Ecuador, “which indirectly harms India while benefiting such countries”.

 

Naidu said India’s exporters already bear a 5.77 per cent Countervailing Duty (CVD), and when all these duties are put together, India faces a 20 per cent duty difference compared to Ecuador. He said the new US duty came into effect on April 5, because of which all the shipments to the US will face this additional burden. Products already harvested based on previous orders have been packed and are now in cold storage awaiting shipping, and these too are now subject to increased duties, Naidu said.

 

In the European Union, Indian exporters face non-tariff barriers including 50 per cent inspection rates and four to seven per cent import duties, the Andhra CM said in his letter. He said that countries such as Vietnam, however, benefit from a FTA with the European Union, enjoying zero-duty access. “As a result, these countries are effectively capturing the European market,” Naidu said.

 

“Countries like Vietnam, Thailand and Japan procure seafood from India, process it and re-export to the US,” the CM said. “But due to the new high tariffs on final products, even those countries are cancelling their orders from India,” he stated. The CM said cold storages are full in Andhra Pradesh as exporters have stopped procuring and the farmers are in a state of utter confusion about getting additional storage to store their harvested marine produce.

 

“All these developments are pushing Andhra’s aqua sector into a deep crisis following which the aqua farmers, hatcheries, feed mills, processors and exporters — all others — are getting affected,” he stated. “Hence, I make an appeal to the Centre to hold necessary discussions with the US (Trump) administration to include shrimp in the exemption list from duties,” Naidu said in the letter.