Indian shrimp exporters will face a new, unprecedented challenge in US markets after the imposition of reciprocal tariffs on India, said Rahul Guha, Senior Director at Crisil Ratings.
“Indian shrimp exporters face an unprecedented new challenge in the US market, which contributes close to 48 per cent of their exports,” Guha added. He noted that with the proposed US tariff hike, additional financial penalties, the 5.77 per cent countervailing duty imposed last year, and existing anti-dumping duties, India is set to become one of the most heavily taxed major shrimp exporters in the US market.
“In contrast, Ecuador, the largest shrimp exporter globally, faces just a 10 per cent tariff and countervailing duties of 3-4 per cent in the US,” Guha added. “In this milieu, the shrimp export volume could potentially fall 7-9 per cent in this fiscal, even as players look for alternative markets to boost their exports,” he anticipated.
According to the Crisil Ratings Senior Director, the operating margin will also fall 50-100 basis points due to the added cost burden of tariffs and their gradual pass-through due to competition from Ecuador. “Thus, the credit profiles of shrimp exporters, already under pressure, will witness further challenges,” Guha stated.
During the financial year 2023-24, India exported an all-time high volume of 17,81,602 mt of seafood worth ₹60,523.89 crore. Marine Products Export Development Authority (MPEDA), a statutory body under the Ministry of Commerce and Industry, promotes and regulates the export of marine products.
The initiatives by MPEDA for boosting shrimp exports are oriented towards production and processing, and not port-specific. To strengthen the export value chain, the government has sanctioned projects adjacent to major ports, namely, modernisation and upgradation of fishing harbour at Visakhapatnam, Chennai, Paradip, Cochin and Mumbai Port with 100 per cent financial assistance under PMMSY in convergence with Sagarmala at a total cost of ₹651.14 crore.
The government, under the Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme, provides financial assistance to the state governments, Union Territories and implementing agencies for the construction of fishing harbours, fish landing centres, the modernisation/ upgradation of existing fishing harbours and the maintenance dredging of the fishing harbours.
During the last five years from 2020-21 to 2024-25, ₹3,490 crore have been allocated under the scheme. The scheme provides for sustainable investment in infrastructure with the objective of enhancing production, productivity, exports and addressing key gaps, including the reduction of post-harvest losses in various components of the value chain.