India’s shrimp industry in troubled waters after Trump tariffs

GANAPAVARAM, India/GUAYAQUIL, Ecuador - Turbulence unleashed by US President Donald Trump’s tariffs could rock global shipments of shrimp to the United States, with exporters in biggest supplier India saying they endanger 2,000 containers packed with the frozen delicacy.

But Ecuador – thousands of kilometres nearer to the US – faces a lower tariff rate and stands to benefit, the exporters say, as shrimp is its most important export after oil.

India’s shrimp industry is staring at a tariff of 26 per cent under Mr Trump’s July plan, which threatens a thriving US$7 billion (S$9.2 billion) seafood export market heavily reliant on US supermarket chains such as Walmart and Kroger as buyers look to renegotiate rates.

Farmers are seeing demand dry up amid the uncertainty as exporters have cut offer prices by a tenth since the tariffs.

“We are suffering huge losses,” said Mr S.V.L. Pathi Raju, 63, standing by the aquaculture pond where he feeds and grows shrimp in India’s southern coastal state of Andhra Pradesh.

“We don’t know who can resolve our price issues,” added Mr Raju, one of several families in the state’s remote village of Ganapavaram grappling with dwindling sales to exporters.

Many also face high payments for shrimp feed and rentals for the land where their saline ponds have been set up.

“I am not sure how I will sustain prices,” said another farmer, 60-year-old Uppalapati Nagaraju, adding that he had been entirely unaware of the concept of tariffs.

“Had I known, I would not have started my cultivation.”

In the face of erratic demand from exporters, Mr Nagaraju now regrets having begun shrimp cultivation just 15 days before the tariff news.

Although Mr Trump has delayed the 26 per cent rate until July, even the current rate of 10 per cent has made exporters skittish.

The US and China are among India’s major markets for seafood exports, which touched US$7.3 billion in 2024, on a volume of 1.8 million metric tonnes that was an all-time high.

Shrimp formed the major component, with the 300,000 farmers of Andhra Pradesh contributing the most to industry supplies, accounting for 92 per cent of India’s seafood exports of US$2.5 billion in 2024 to its biggest market, the US.

Industry representatives have joined a state government panel weighing the impact of tariffs and looking for ways to boost exports to other countries, such as China.

But exporters fear Ecuador’s competitive edge from Mr Trump’s planned lower tariff rate of 10 per cent for the South American nation, particularly since it is much closer to the US and is its second-biggest market for shrimp.

Yet, Ecuadorean producers, with US$1.55 billion in shipments in 2024, are less optimistic.

Although US consumers have fuelled growth in the area of processed shrimp, Ecuador has yet to attain the capacity to replace India’s production, said Mr Jose Antonio Camposano, president of its National Chamber of Aquaculture.

India “will be obliged to look for other markets where Ecuador is selling, like China and the European Union, so we’ll have more pressure in other markets”, Mr Camposano added.

Journey of 40 days

Reuters visited one Indian factory where shrimp are washed and machine-sorted automatically by size before a manual quality check by workers in masks and gloves. Then a conveyor belt whisked the seafood away to be quick-frozen.

Thousands of tonnes of frozen shrimp leave Andhra Pradesh each year on a voyage that usually takes 40 days to arrive at ports in New York, Houston and Miami, en route to restaurants and the shelves of retailers such as Safeway and Costco.

Mr G. Pawan Kumar, the chief of India’s seafood exporters group, said he was worried about shipping containers already packed with frozen produce at previously agreed rates now set to be renegotiated by US buyers following the tariffs.

“Ten per cent is high; we exporters operate on a 3 per cent to 4 per cent margin,” said Mr Kumar, president of the Seafood Exporters Association of India, which is pushing the government to win the industry exemptions in trade talks with the US.

“It’s game over” for the Indian industry if the tariff rate of 26 per cent takes effect in July, said one shrimp exporter, who spoke on condition of anonymity.

He was in talks with US clients who did not want to fully absorb the 10 per cent tariff, he said, pointing to the risk of earning no profit if he had to sell 130 shipping containers that had already been packed.

In Texas, the seafood section at a Walmart supermarket was piled high with packs of frozen shrimp, among them a “jumbo” variant labelled a product of India and priced at US$7.92, under Walmart’s own “Great Value” brand.

Ms Latriece Watkins, chief merchandising officer for Walmart in the US, said: “We have built long-lasting and deep relations with suppliers over the years.

“We expect that to continue, going forward.” REUTERS