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Iruthayarajan complains that exporters are buying his catch at throwaway prices, even during July-September, post-monsoon peak season. What he doesn’t know is that a tariff tsunami, half a world away in the United States, has begun to shake India’s $7.38 billion seafood industry—threatening nearly 28 million livelihoods, from aquaculture farmers in Andhra Pradesh to seafood processors and exporters in Kerala, including small-scale fishermen like him across the country.
US tariffs push sector into deep water
India’s seafood sector has been caught off guard by Washington’s decision to double import duties on Indian shipments to 50%. The US, which accounts for 35% of India’s seafood exports at $2.8 billion in FY25, had already imposed a 25% levy. President Donald Trump has warned of another 25% tariff plus penalties linked to India’s oil imports from Russia. When the new duties kick in on August 27, the move could wipe out nearly ₹24,000 crore worth of trade.
“We already have an anti-dumping duty of about 10% on shrimp exports to the US. With these new tariffs and penalties, that will climb to around 60% for shrimp and 50% for other seafood exports,” says Abraham John Tharakan, chairman of Kochi-based Amalgam Group of Companies, seafood exporters and aqua feed producers.
A veteran of the industry, Tharakan recalls how India painstakingly built its position in the US market, moving from raw suppliers to processors selling value-added shrimp under the own-brand labels of American retail giants. “We are producing about a million tons of aquaculture shrimp today,” he says. “But Ecuador has already overtaken us—they’re producing almost 1.5 million tons now.”
The south American country, India’s closest competitor, now enjoys a sharp edge with just a 10% duty in the US market. Other competitors like Indonesia and Vietnam faces 19% and 20%, respectively.
Shrimp remains India’s single largest seafood export, led by the Vannamei variety, with Andhra Pradesh alone contributing 60% of total shipments. With the new tariff, shrimp farmers there are reeling, and the ripple effect is spreading nationwide. Frozen fish, cuttlefish, squid, dried seafood, and live or chilled items—worth nearly ₹7,000 crore annually from Kerala alone—are also caught in the net.
Prices crash, industry seeks urgent relief
The uncertainty is already choking the trade. “US buyers have asked us to hold all current orders,” says Alex K. Ninan, vice-president of the Seafood Exporters Association of India (SEAI). “That means a huge pile-up in warehouses. We’re looking at alternate markets like the EU, Japan, and China, but even they are asking us to wait, expecting a price crash.”
China is India’s second-largest seafood destination, with a 19% share in terms of export value in US$, followed by Japan at 5.4%. The Indian government has urged exporters to “bravely face” the challenge by diversifying into new destinations and boosting domestic sales.
SEAI secretary general KN Raghavan says the recently concluded free trade agreement with the UK could open opportunities next year, while a bilateral pact with the EU may ease tariff and non-tariff barriers. “New markets like Norway, Sweden, and Switzerland could follow,” he says. “But nothing can immediately replace a $2.8 billion market. That will take time.”
On the home front too, limits remain. India is largely a meat-eating country, with fish consumption concentrated in coastal states. “There is also a cultural issue—Indians prefer fresh food,” Raghavan says. “Frozen products are still alien here. They can be introduced through restaurants, especially high-end chains, but it will take time. And even then, the value will be lower.”
Nearly 90–95% of India’s shrimp exports are farmed varieties such as Vannamei and Black Tiger, while sea-caught shrimp make up only 5–10%. But since Indian trawlers generally do not use Turtle Excluder Devices (TEDs), most sea-caught shrimp is barred from the US. Iruthayarajan’s catch, in fact, is for Europe and Japan. Yet even those markets have turned unprofitable with the global price crash.
The benchmark ex-farm price for 40-count shrimp was about ₹350 per kg, briefly touching ₹450 as exporters rushed to ship before the first tariff deadline of August 1. But prices have since plunged below ₹300, and in some cases ₹250, with few takers.
“It’s mainly the large shrimp cultivators in Andhra Pradesh and exporters dependent on the US who are hurting,” says Shaji Baby John, CMD of Kings Infra Ventures, an integrated aquaculture company focused on China, Vietnam, Japan, and the Middle East. For him, the tariff is “a blessing in disguise.” US exporters, he says, have long dictated farm-gate prices. “Now those players have exited procurement completely. Usually, at this time of year, prices shoot up because of a shortage. This year, they’ve collapsed.” Kings Infra leases shrimp farms, and supplies feed. Since it runs integrated production for exports, it has a control over the supply chain.
Even at a 50% duty, some US buyers are still willing to source from India, at least for now. That’s because of the sheer scale and quality of the brands, which cannot be replaced from shelves overnight. “Over the years, we have set up some of most-advanced factories and grown skilled-manpower, which can’t be replaced by Ecuador,” Tharakan says.
Exporters typically pay duties upfront before shipping and with higher tariffs , financing has become a nightmare. “If I ship goods worth ₹1 crore, I need an additional ₹50 lakh as working capital to pay the 50% duty, and the proceeds are realised only after two to three months,” Tharakan explains. “If I ship ₹10 crore a month, I need an extra ₹5 crore locked up in rotation purely for the additional tariff. “My working capital is broken just because of this.”
“The entire industry has come to a standstill,” Ninan adds. “And the most unfortunate part is banks are not renewing our working capital limits. Since the US market is gone, banks are threatening to realise bills from shipments to other countries. If they do that, how do we pay salaries or keep cold storage running 24/7 with all this inventory?”
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Raghavan says the industry is staring at a severe cash crunch and has urged the government to step in with at least 30% ad hoc working capital support. “We also need interest subvention as was done during the Covid period and a moratorium on loan repayment for up to 240 days. That will give the industry some breathing space to find new markets and build a strategy for value-added products.”
Joseph Xavier Kalapurackal, Vice-chairman of the Kerala Matsya Mekhala Samrakshana Samiti—a forum for the protection of the fisheries sector—explains that the cost of a fishing trip is typically shared 60% by the fishermen and 40% by the labourers. On average, a 10–15 day voyage requires 3,000–3,500 litres of diesel, costing around ₹4.5–5 lakh, which alone accounts for nearly 70% of the landing cost. “Only if the catch is worth more than ₹5 lakh does a fisherman make a profit,” he says. With a 25% tariff, exporters will inevitably factor in the additional cost and cut purchase prices. “Those who venture into the high seas face all the risks, yet they are the ones who lose the most,” he adds.