 "Indian shrimp sector crisis, US tariffs on shrimp exports, shrimp export losses India, $1 billion shrimp loss, vannamei shrimp exports, 50 count shrimp price drop, farm-gate shrimp prices India, Rs 70/kg shrimp price fall, Indian seafood export impac")
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Indian shrimp exporters are expected to register a marginal 2–3 per cent rise in revenues in FY26, driven by higher prices and currency gains, according to a Crisil Ratings report. However, export volumes are likely to remain flat due to anticipated US tariff hikes and weak demand in key markets amid sluggish economic growth.
Margins under pressure despite value addition efforts
The Crisil report notes that operating margins will remain under strain, as the increased tariff burden will be passed on only gradually and partially. While exporters are exploring new markets and enhancing value-added products, these initiatives may take time to improve profitability.
The report highlights that extended working capital cycles will increase exporters’ dependence on external borrowings, impacting credit profiles. Nevertheless, capital structures are expected to remain stable.
Market share and demand outlook
Crisil’s analysis of 63 shrimp exporters, representing around 55 per cent of the industry’s revenue, supports this outlook. Global shrimp demand has stayed steady at roughly 4 million tonnes over recent years and is expected to remain subdued this fiscal year due to weak economic growth in major importing regions such as the US, EU and China.
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 "Indian shrimp sector crisis, US tariffs on shrimp exports, shrimp export losses India, $1 billion shrimp loss, vannamei shrimp exports, 50 count shrimp price drop, farm-gate shrimp prices India, Rs 70/kg shrimp price fall, Indian seafood export impac")
 "Indian shrimp sector crisis, US tariffs on shrimp exports, shrimp export losses India, $1 billion shrimp loss, vannamei shrimp exports, 50 count shrimp price drop, farm-gate shrimp prices India, Rs 70/kg shrimp price fall, Indian seafood export impac")
India holds about a fifth of the global shrimp market, with domestic production forecast to stay flat at 1.2 million tonnes. Low global prices have discouraged farming expansion this year.
US tariffs and competition from South America
India exports nearly 48 per cent of its shrimp to the US. Although the US has temporarily paused reciprocal tariffs, these reliefs primarily benefit South American exporters such as Ecuador, the world’s largest shrimp supplier. Indian exporters are expected to face stronger competition in low-value-added segments such as raw, frozen and peeled frozen shrimp, which offer lower profitability.
Himank Sharma, director at Crisil Ratings, said, “Last fiscal was challenging for Indian shrimp exporters due to price pressures and US countervailing duties. With the US imposing reciprocal tariffs this year and sluggish demand from other key markets, revenue growth will likely remain in low single digits despite improved realisations.”
Competitive edge in value-added products
Low-value-added shrimp exports are expected to face rising challenges. However, Indian exporters maintain a competitive advantage in value-added products compared to Asian peers such as China, Vietnam, Thailand and Indonesia, who control over a third of the US market despite higher tariffs.
Value-added products currently account for about 10 per cent of India’s shrimp exports, but this share could rise to 15–17 per cent over the next 2–3 years, benefiting from tariff advantages, according to the report.
Despite growth in value-added segments, limited volume expansion and tariff pressures are expected to reduce profitability by 50–60 basis points this fiscal year, bringing margins down to around 6.5–6.7 per cent, after a 70 basis point decline last year.
Profitability and credit profile outlook
Working capital cycles may lengthen as exporters face higher inventories and slower collections amid weak demand. This will lead to increased working capital borrowing alongside long-term debt for capital expenditure on value-added products, while capacity utilisation remains moderate.
Nagarjun Alaparthi, associate director at Crisil Ratings, said, “Debt levels will rise but capital structures will stay healthy. However, lower profits and higher interest costs will reduce interest coverage ratios. Gearing is expected to remain comfortable at 0.5 times by March 2026, slightly up from 0.46 times in March 2025, while interest coverage may ease to around 4.3 times in fiscal 2026 from 4.8 times last year, reflecting margin pressure.”
The final impact of reciprocal tariffs, revisions to US anti-dumping and countervailing duties, their effects on demand, and forex fluctuations remain critical factors to monitor for the sector’s outlook.
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