In a significant development for India’s seafood industry, President Donald Trump’s decision to pause a planned 26% tariff on Indian shrimp exports, reducing it to 10% until July 2025, has brought temporary relief to Indian exporters. This move allows India to resume shipments of 35,000–40,000 tonnes of shrimp (2,000 containers) to the U.S., avoiding immediate financial losses.
Background on the Tariff Situation
The U.S. is India’s largest shrimp market by both volume and value, with shrimp exports to the U.S. 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.
Immediate Impact of the Tariff Pause
The pause in the tariff increase has been welcomed by industry stakeholders. K.N. Raghavan, Secretary General of the Seafood Exporters Association of India, expressed relief, stating that the decision allows India to be on par with other exporters to the U.S. Approximately 2,000 containers of shrimp that were previously delayed due to tariff uncertainty are now being prepared for export.
Current Tariff Structure and Its Implications
Despite the pause, Indian shrimp exports to the U.S. still face an effective customs duty of 17.7%, which includes 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 a crucial window for exporters to fulfill existing orders 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 industry is also concerned about the potential impact on other major markets, such as China and the European Union, where Ecuador, a major competitor, faces relatively lower tariffs.
Conclusion
The U.S. 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 U.S. 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 U.S., the industry remains hopeful for a more favorable trade environment in the future.