US duty cut offers relief to Indian shrimp exporters, but timing a concern

Indian shrimp exporters have welcomed the US decision to cut tariffs, easing severe cost pressures, though industry players say the move came too late as major import orders for 2026 are in place

After being hit by a drop of up to 60 per cent in exports to the US in the last three months, and price uncertainties in the last six months, the shrimp industry in India got a fresh lease of life on Tuesday with the cut in US tariffs. However, industry experts raise concerns that the change came at least a month late, as major importers in that country had placed advance orders for 2026 by the end of December or early January.

 

Despite this, India's shrimp exports zoomed to a record 8 lakh tonnes in 2025, driven by diversification to new markets like China, Russia, and Vietnam, government data show. More importantly, overall marine exports to China grew almost two-fold from $76 million in July to $205 million in November, as per Ministry of Commerce data.

   

The relief came at a time when the industry was staring at a loss of $1 billion in annual exports to the US. After additional levies of 50 per cent, along with countervailing duty (CVD) and anti-dumping duty, taxes for Indian shrimp in the US market had increased to as high as 58 per cent since August last year. With the current rate of 18 per cent announced by US President Donald Trump, taxes on shrimp are likely to come down to 26 per cent.

 

"Though our main competitor, Ecuador, still has an advantage of total taxes of 18.78 per cent, including CVD, other major producers like Indonesia and Vietnam are at 24 per cent and 49 per cent respectively. This is a huge relief for us, compared to the earlier 58 per cent," said Jagadish Thota, a national committee member of the Seafood Exporters Association. Thota added that the decision, however, came almost a month late, as in the last three months the loss in orders was as high as 60 per cent for some producers, while advance orders for 2026 by major players had already been placed by the end of December or early January.

 

Shift in market dynamics

 

Data collated by InCred Research shows that in the 2025 calendar year, India is poised to export an all-time high of shrimp in volume terms, at around 800,000 tonnes. Official data show that till October 2025, the country had exported 660,000 tonnes of shrimp, while November and December are projected at another 75,000 tonnes and 65,000 tonnes respectively. India’s earlier record shrimp exports were in the 2021 calendar year at 734,000 tonnes.

 

Despite the dip in demand from the US, India's marine product exports increased to $7.4 billion from January to November 2025, versus $7.1 billion for the entire 2024.

Out of the total shrimp exports in 2025, around 51 per cent, or $3.8 billion, was one variety, Vannamei. "India has diversified export destinations to other markets like China, Russia, and Vietnam," said Duggineni Gopinath, a shrimp farmer from Prakasam district in Andhra Pradesh and president of the Prakasam Shrimp Farmers Association.

 

The massive market shift was evident in the 2025 export numbers too. In July, before the tariff, US marine exports were $239 million, while those to China were hardly $76 million, and Vietnam accounted for $54 million. By November, the pressure in the US market became evident in the numbers as the US market came down to $210 million, while China narrowed the gap to $205 million, and Vietnam to $51 million.

 

Shrimp prices across all categories had also dropped by 10–15 per cent, triggering widespread panic among farmers and exporters.

 

"This marks a significant inflection point for India’s livestock, seafood, and shrimp export ecosystem. Coming soon after India’s trade pact with the European Union, this agreement reinforces India’s growing integration into global trade networks and sends a strong confidence signal to export-oriented agri and animal-protein industries," said Divya Kumar Gulati, Chairman of the Compound Livestock Feed Manufacturers Association (CLFMA) of India.

 

"For the seafood and shrimp sector, where the United States remains India’s single largest export destination, the tariff reduction materially improves price competitiveness against key rivals such as Vietnam and Indonesia. Shrimp exports, especially Vannamei, had faced volume pressure under elevated duties; the revised tariff regime helps correct this cost disadvantage and can support demand revival, volume stabilisation, and improved margin visibility for exporters," Gulati added.

Additionally, the reduction in tariffs on high-protein feed additives (soy-based and fishmeal alternatives) imported from the US lowers production costs for Indian shrimp farmers, directly strengthening farm-level economics and long-term supply sustainability. In the Budget, the basic customs duty has been slashed on items such as shrimp feed ingredients, fish hydrolysate, and surimi, a protein component used in feed, from 30 per cent to 5 per cent.

 

"The agreement also represents an important shift for livestock and animal product exports, which had previously struggled with higher landed costs in the US market. Lower tariffs improve entry conditions, enhance pricing flexibility, and enable Indian exporters of processed meat and value-added livestock products to gradually regain competitiveness and rebuild market share," he said.