India’s seafood exporters are gearing up to send 35,000 to 40,000 tonnes of shrimp to the United States after US President Donald Trump’s decision to pause a planned 26% reciprocal tariff, reducing it to 10%. This move has brought significant relief to the industry, which had been bracing for substantial financial losses.
“There is a lot of relief now as we are at par with other exporters to the US. Now the shipments that were held back will be processed,” said K.N. Raghavan, Secretary General of the Seafood Exporters Association of India (SEAI). Approximately 2,000 containers of shrimp, which had been delayed due to tariff uncertainty, are now being prepared for export.
Background on the Tariff Situation
The US is India’s largest shrimp market by both volume and value, with shrimp exports to the US valued at $2.7 billion in the 2023-24 fiscal year. The planned tariff increase had caused significant uncertainty and concern within the Indian seafood industry. Exporters were particularly worried about the potential impact on their ability to fulfill existing contracts and maintain market share.
Current Tariff Structure and Its Implications
Despite the pause, Indian shrimp exports to the US still face an effective customs duty of 17.7%, including 5.7% in countervailing duties and 1.8% in anti-dumping duties. This higher effective rate means that Indian exporters continue to bear significant costs under delivery duty-paid arrangements. The 90-day pause provides exporters with a crucial window to fulfill existing contracts without incurring additional costs.
Industry’s Concerns and Future Outlook
While the temporary reprieve offers some relief, industry leaders emphasize the need for long-term solutions. Raghavan urged the Indian government to focus on securing a “level-playing field” for the country’s seafood exports during upcoming trade talks before the tariff pause expires.
“The 90-day pause provides exporters the opportunity to fulfill these orders without the extra cost,” an industry representative said. “However, we need to ensure that we can maintain our competitive edge in the long term.”
Conclusion
The US tariff pause on Indian shrimp exports provides a much-needed breather for India’s seafood industry. However, the long-term sustainability of shrimp exports to the US will depend on ongoing negotiations and the ability to address underlying trade challenges. As India prepares to ship 35,000-40,000 tonnes of shrimp to the US, the industry remains hopeful for a more favorable trade environment in the future.