Shrimp at the Crossroads: How India’s Blue-Gold Can Bounce Back from Tariff Tides

India’s shrimp industry, the crown jewel of its seafood exports, is reeling under a 50% tariff shock from the United States effective 27 August 2025. The levy combines a 25% reciprocal tariff with an additional 25% penalty, stacked over existing anti-dumping duties of 2.49% and countervailing duties of 5.77%. Together, these push the effective duty to 58.26% on Indian shrimp exports. The impact is significant—since the US alone absorbed nearly 48% of India’s $5 billion shrimp exports in FY 2024–25.

Let's look at the immediate fallout of these tariffs and the possible pathways for India’s shrimp industry to regain momentum.

The Tariff Hit: Quantifying the Shock

Post tariff, Crisil Ratings projects a 15–18% drop in export volumes and an 18–20% decline in revenue for FY 2025–26. Operating margins are expected to compress by 150–200 basis points, reaching a decadal low of 5–5.5%. This erosion stems from exporters’ inability to pass on tariff costs to buyers, especially in price-sensitive US retail chains. The tariff shock is not isolated; it affects 66% of India’s $86.5 billion exports to the US across sectors. Ecuador, India’s closest competitor, faces only a 15% tariff and is poised to capture displaced US demand.

The compounded impact of tariff disadvantage and margin compression signals a structural crisis for India’s shrimp sector, demanding urgent strategic recalibration.

Immediate Impact: Andhra and Gujarat Under Pressure

Andhra Pradesh, which contributes over 50% of India’s shrimp output, is experiencing a dual crisis: tariff shock and biological stress. Disease outbreaks, such as White Spot Syndrome Virus (WSSV), Enterocytozoon hepatopenaei (EHP), and Koi Herpes Virus (KHV), have wiped out nearly 80% of shrimp cultivation in the current season.

Farm-gate prices have collapsed, with 100-count shrimp selling at ₹230/kg, down from ₹305/kg for 60-count and ₹390/kg for 30-count. Not only that, today only 1 lakh acres are under cultivation, compared to the usual 6 lakh acres. Gujarat, which contributes approximately $700 million in seafood exports annually, is also facing productivity declines and farmer distress. Farmers in both states are considering switching to crops such as seaweed, scampi, or saline-tolerant horticulture. Andhra Pradesh’s new Seaweed-Shrimp Integration Model, launched in August 2025, aims to diversify income streams and improve pond health.

However, the immediate fallout includes cancelled export orders, demand for 20% discounts from US buyers, and retrenchment risks for over 2.8 crore livelihoods tied to aquaculture and allied sectors.

The Market Rerouting: Beyond the US

While the United States remains India’s largest shrimp buyer, exporters are now shifting their focus to alternative markets. The India–UK Free Trade Agreement and ongoing negotiations with the European Union, Russia, and China offer partial relief.

Crisil notes that processors are actively redirecting shipments to the UK, China, and Russia, which together could absorb up to 20% of displaced US volumes. However, these markets offer lower margins and fragmented demand. China, for instance, imported 136,164 metric tonnes of Indian shrimp last year, but prefers smaller quantities and bulk formats, unlike the US, which demands value-added, large-count shrimp.

Ecuador, Vietnam, and Thailand, India’s key competitors, face tariffs under 30% and are geographically closer to the US, giving them a freight advantage. India’s export strategy must therefore evolve from volume substitution to product and market diversification. The Marine Products Export Development Authority (MPEDA) has facilitated 92 buyer-seller meets in the past five years. Yet, without bilateral tariff relief or preferential access, rerouting alone cannot restore lost margins. The rerouting must be accompanied by a shift in product mix and branding to sustain competitiveness.

Learning from Pharma and IT: Finding New Pathways in Crisis

India’s pharma and IT journeys prove one thing: when global doors start to close, Indian industries find new ways to open others.

Take pharma. A decade ago, US FDA clampdowns threatened to derail Indian exports. Instead of giving up, companies doubled down on compliance, invested in global-standard facilities, and pivoted toward higher-value segments like biosimilars and contract manufacturing. That grit turned India into the world’s largest supplier of generics, now eyeing $350 billion in exports by 2047.

The IT industry faced a different storm—visa restrictions and anti-outsourcing sentiment in its biggest market. Rather than retreat, Indian IT firms localised staff in the US, expanded into cloud and cybersecurity, and climbed the value chain with consulting and platform services. The result: a $200 billion industry where 54% the revenue still comes from the US, despite headwinds.

The way ahead for shrimp is clear—and it lies in moving up the value chain. The industry cannot compete forever on bulk frozen exports, vulnerable to tariffs and price wars. Instead, it can pivot toward value-added formats like breaded, peeled, and ready-to-cook shrimp, which are gaining traction in global retail and foodservice. Certification upgrades (BAP, ASC) and traceability technology can open premium markets, while R&D in disease-resistant broodstock and biosecure farming will build resilience at home.

For investors and traders, this shift could be pivotal. Listed seafood players that successfully transition to higher-margin value-added products may unlock fresh growth and rerating potential, while those stuck in commodity exports risk margin pressure. Much like pharma and IT stocks in their transition years, the winners in shrimp will be those who invest in compliance, branding, and innovation.

Stocks and Sectors to Watch: Exporters and Ancillaries

The tariff shock has triggered volatility in listed shrimp exporters, including Avanti Feeds, Apex Frozen Foods, and Zeal Aqua. Crisil expects operating margins to fall to 5–5.5%, with interest coverage ratios moderating to 3.3x from 4.8x in the last fiscal year. Exporters with high exposure to the US face erosion of their credit profile and working capital stress. However, ancillary sectors show relative resilience.

Feed makers like Avanti and Waterbase benefit from stable domestic demand and are exploring alternative species feed. Cold storage and logistics players, such as Nila Sea Foods and Devi Sea Foods, are expanding capacity and investing in traceability technology. Ready-to-cook seafood processors are expected to gain from rising domestic consumption and retail partnerships.

Read More: How Trump’s 50% Tariff on Indian Goods

Conclusion

In the near term, shrimp exporters tied heavily to the US market may see earnings pressure, margin compression, and some volatility in listed aquaculture stocks. However, ancillary players in feed, cold storage, and logistics are better cushioned due to domestic demand and diversified exposure, offering relative stability for investors.

Looking ahead, the real opportunity lies with exporters who move up the value chain—pivoting to branded, ready-to-cook formats, investing in biosecure farming, and capturing domestic retail demand. These shifts can unlock stronger margins and reduce reliance on volatile export cycles.

For traders, the tariff shock is likely to trigger short-term price swings, but for long-term investors, this is a structural reset. Much like pharma and IT, which used global headwinds to transform into export leaders, Indian shrimp players that adapt now could redefine the sector’s global competitiveness. In other words, today’s disruption could seed tomorrow’s multi-year growth story in aquaculture-linked stocks.