Indian shrimp industry faces major setback as US tariffs bite

INDIA – India’s shrimp industry, the world’s second-largest after Ecuador, is facing one of its toughest challenges yet, as steep US tariffs threaten to cripple an export sector worth billions of dollars. 

The tariffs, introduced in May by former US President Donald Trump, have caused prices to plummet and left millions dependent on shrimp farming staring at financial ruin, according to an article by Al Jazeera.

India exported US$5 billion worth of frozen shrimp in the financial year ending March 2025, with the United States accounting for nearly half of the shipments. 

But since the tariffs were imposed, now totaling 58.26 percent, including countervailing and anti-dumping duties, farm gate prices have plunged from 300 rupees (US$3.38) per kilogram to about 230 rupees (US$2.59). 

With production costs, most of which are aquafeed costs, hovering around 275 rupees (US$3.10) per kilogram, farmers are incurring heavy losses.

The crisis is being felt across India’s major shrimp-producing states, Andhra Pradesh, Tamil Nadu, West Bengal, Gujarat, Odisha, and Kerala, where the industry employs about 10 million people, from hatchery workers to processors. 

“The hike in tariffs will discourage farmers from continuing to invest in shrimp culture that also incurs upfront costs of land lease, seed and feed,” said Rahul Guha, senior director at Crisil Ratings.

Hatcheries shutting down

The ripple effects of the tariff shock are devastating India’s 550 private hatcheries, which depend on shrimp farmers for business. 

According to Ravid Kumar Yellanki, president of the All India Shrimp Hatcheries Association, at least half have already halted operations. 

“Undoubtedly, the US tariffs have begun to have a major impact on the hatcheries, with many halting production,” he said.

These hatcheries collectively produce about 80 billion seeds annually but have had to discard seven to eight billion in recent months due to lack of demand. With seed shelf life limited to just three or four days, the financial toll has been severe.

Farmers have also long complained about the quality of brood stock, which is flown in from the US. Poor adaptability to Indian conditions has led to disease outbreaks, compounding the sector’s woes. 

“We have been demanding the government to breed the shrimps using local brood stock in order to get high-quality seeds that adjust to our conditions,” said IPR Mohan Raju, president of the Prawn Farmers Federation of India.

Ecuador’s growing advantage

India’s troubles are being amplified by Ecuador’s rising dominance in the US market. 

The South American nation produces vannamei shrimp, the same species India mainly exports, at lower costs and faces tariffs of only 15 percent. 

Between January and September 2025, Ecuador shipped over 1 million tonnes of shrimp to the US worth US$5.51 billion, up 23 percent from the same period last year.

Industry experts warn that Indian exporters will now have to look beyond the US and diversify their markets. 

Aquaculture veteran Manoj Sharma says that while exporters have long focused on overseas buyers, it’s time to tap into the domestic market’s potential. 

“There is complete ignorance of the domestic market among exporters … and that has a lot of potential,” Sharma told Al Jazeera.

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