India’s agri-exports to the United States amounted to USD 5.9 billion in Financial Year 2024-25 (FY25), of which the largest commodity is shrimp, valued at USD 2.4 billion. Until April 2025, the effective tariff on shrimp stood at 8.26 percent including 5.77 percent counter-vailing duty and 2.49 percent of anti-dumping duty. The subsequent hike raising the effective duty to 58.26 percent in August—has dealt a severe blow to India’s shrimp sector, underscoring the risks of excessive reliance (~48 percent) on a single market. Competitiveness has eroded sharply in the export market, and field evidence shows that farm-gate prices have already fallen by 8-10 percent for farmers operating within a capital-intensive production system. The pressure is expected to intensify further in the next season if the punitive tariff imposed by the United States is not withdrawn.
In this context, this policy brief evaluates the implications of the US tariff shock across the entire value chain of shrimps and how to cope up with this enhanced tariff by the US. Our analysis highlights the urgent need for a coping strategy encompassing safety net for farmers and processors, as well as a diversification strategy for exporters. Such a strategy must examine trade competitiveness with major exporters, demand patterns in major importing countries, and both tariff and non-tariff barriers in key markets.
The findings call for a four-pronged coping strategy. First, in the short run, value-chain financing through concessional working capital loan for exporters, freight subsidies, interest free loans for farmers, and wage compensation schemes for workers will reduce risks and ensure liquidity across the shrimp value chain. Alongside this, trade negotiations with the US are needed to at least reduce the additional 25 percent penalty tariff. Second, for medium and long-run, our trade indicators show that export market diversification should prioritize China, Japan, South Korea, European Union countries, and Russia supported by tariff negotiations, trade agreements, and compliance facilitation. Third, we need product diversification, which must move beyond bulk peeled shrimp to higher-value segments such as ready-to-cook, breaded, and seasoned formats, underpinned by certifications in sustainability, biosecurity, and traceability. Fourth, domestic market development should create an internal demand buffer by positioning shrimp as a nutritious protein source in supermarkets, e-commerce platforms, and the HoReCa segment.
