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The country’s farm sector has expressed relief with American President Donald Trump putting on hold for three months the imposition of steep tariffs on exports even as the Andhra Pradesh government has constituted a panel to study the challenges that tariffs posed to India’s marine-food products, a sector which was seen to be as the worst-affected.
The 16-member panel, formed before the United States (US) halted the tariffs, has representatives from major seafood- and feed meal-producing companies and senior officials.
Sources said one of its mandates was to study shrimp-production patterns and exports from India and Ecuador. It will also look at steps to increase exports of Indian shrimp to the European Union, China, and Japan.
Ecuador emerged as one of the major competitors for India’s shrimp exports to the US after American President Donald Trump had imposed a 26 per cent additional duty on India while keeping it at 10 per cent for Ecuador. Andhra Pradesh exports the largest quantities of shrimp from India. The committee has been asked to file a preliminary report in five days on the impact of tariff-relief measures and its solutions, and a comprehensive report within three weeks on long-term policy measures.
The contest of tariffs and counter-tariffs between the US and China continues to keep several commodity markets on tenterhooks, particularly, those in which both countries have a surplus and are major trade partners.
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For example, the US is a large exporter of edible oil, particularly soybean oil, with the bulk of it going to China. Traders in India fear if the US finds it difficult to push its products into China, it might consider India as an alternative destination.
India imports 3.4-4 million tonnes of soybean oil annually. Of that, around 65 per cent comes from Argentina.
Traders are apprehensive that the US might look to sell 100,000-150,000 tonnes of soybean oil to India annually to compensate for the loss of markets elsewhere.
Similarly, China, which is one of India’s major trading partners, has stepped up its purchases of rapeseed meal from India to replace Canada, a country on which it has imposed 100 per cent duties.
Cotton is another commodity in which traders are expecting a jump in demand from China due to high tariffs on US exports to India’s northern neighbour.
The Confederation of Indian Textile Industry has urged the government to consider introducing an interim textile export protection scheme to mitigate the burden of additional tariff costs faced by exporters, terming the 90-day pause on reciprocal tariffs announced by the Trump administration a stopgap measure.
The organisation has stressed the government must intensify its engagement with US counterparts to arrive at a more sustainable and mutually beneficial solution.
The US is the largest destination for Indian textiles and apparel exports.
“The relief will bring short-term respite to exporters of textile and apparel, who were bracing for higher tariffs. However, this measure is only a stopgap arrangement. It is crucial that the government intensifies its engagement with US counterparts to arrive at a more sustainable and mutually beneficial solution,” CITI Chairman Rakesh Mehra stated, according to news agency PTI.
Shrimp markets in India, meanwhile, stabilised a bit on news that tariffs have been postponed. Prices of Indian ‘Vennamei’ shrimp up to 50 counts (which accounted for more than half the shrimp exported to the US) have dropped by ₹30-50 per kg due to the imposition of the 26 per cent tariff. The tariff, together with other duties and levies, would have made Indian shrimp costlier by almost 40 per cent, leading to demand destruction.
Before the imposition of the tariff, Indian shrimp up to 50 counts was selling at ₹470-350 a kg.
India exported shrimp worth almost $2.3 billion to the US in FY24. That was more than 90 per cent of seafood exports to the US. The US comprised 66 per cent of the shrimp India exported to the world in FY24, the trade data showed.
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