Can India’s Shrimp Industry Overcome Hit from US Tariffs
India’s strengths and weakness in the labor-intensive shrimp export business, which is a major employer in the country, are analyzed by Sunil Mani
(Photo: Farmed White-leg shrimp. Courtesy Wikimedia Commons.)
October 11, 2025
by Sunil Mani*
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Last month, US imports of frozen shrimp from India declined by roughly a tenth. This was due to a rise in prices, following an additional 50 per cent tariff imposed by President Donald Trump’s Administration, which started in August.
A shipment of shrimp from India, which previously landed at $2.20 per kilogram, now costs US importers between $3.30 and $3.50 per kilogram. Total tariffs are now nearly 60 per cent. The reduced supply from India and the higher prices of Indian imports has led to overall prices for shrimp, paid by wholesalers and large restaurant chains in the US, rising by more than a fifth. Medium-sized shrimp, the most common variety in restaurant dishes, saw the sharpest price spikes.
The Trump Administration justified the higher tariff on grounds of “unfair trade practices and government subsidies” for India’s shrimp industry. “Indian shrimp imports have devastated the U.S. commercial shrimp industry,” stated John Williams, executive director of the Southern Shrimp Alliance, NationalFisherman.com reported. President Trump’s “additional tariffs on imports from India offers a vital lifeline to (American) shrimpers…that allows them to go back to work, harvesting a wholesome, nutritious product for American families.”
The United States is the world’s largest consumer and importer of shrimp, with annual consumption exceeding 680 million kilograms. More than half of this demand is met through imports, with India as a leading supplier. In the fiscal year ended March 2025, Indian shrimp exports to the U.S. were $2.7 billion, more than a third of the country’s total seafood exports of $7.5 billion. Shrimp accounts for three quarters of the value of India’s total marine exports.
Last year, nearly 90 per cent of India’s one million metric tonnes shrimp output was exported. Due to the drop in US demand, farm-gate prices for shrimp have plunged in India. Farmers and processors in India are laying off thousands of laborers and reducing working hours for others. The drop in income is also forcing some farmers, especially small farmers with high debt burden, to abandon their shrimp ponds.
Over the past decade or so, the rise in India’s shrimp exports have been driven by growing demand from China, the European Union and Russia, in addition to the US. In fiscal year 2025, China imported roughly 136,000 tonnes, the second-largest market for Indian shrimp. While a significant domestic producer, China imports large quantities to meet demand.
India’s shrimp exports face major competition from Vietnam, Ecuador, and Indonesia. In 2024, Vietnam exported around 1.3 million tonnes of shrimp, Ecuador roughly 1.2 million metric, and Indonesia around 200,000 tonnes. But these countries have limited production capacity to replace Indian exports to the US. Also, while the US tariffs on these countries are lower than that on India, their costs, and hence prices, are higher than that of Indian shrimp exporters.
(Photo: A shrimp pond in Kerala. Courtesy Wikimedia Commons.)
Shrimp farming and processing is highly labor intensive which gives India, with a large unemployed population, a major advantage. The shrimp industry in India provides jobs and income which supports nearly 30 million people.
Most of the laborers are women, who work in hatcheries, feed mills, processing plants, and peeling sheds—often on short-term or daily wage contracts. Amidst widespread unemployment, the workers are eager to find such work to support themselves and their families.
But there are severe abuses of labor practices, which is frequently covered in the Western media and by influential consumer organizations like the Corporate Accountability Lab and the Monterey Bay Aquarium. Abuses include forced overtime, restricted movement, hazardous working conditions, child labor, and instances of debt bondage, especially among migrant workers.
Roughly 85 per cent of India’s shrimp exports are farm-grown in controlled pond systems, while wild-caught marine species make up the rest. White-leg shrimp, Litopenaeus vannamei, accounts for nearly all the farmed shrimp, including in India. The species is fast growing, mostly disease resistant, and offer year-round availability. Wild marine shrimp, mainly black and green tiger varieties. command premium prices ranging from 30 per cent to double that of farmed shrimp.
The state of Andhra Pradesh is the dominant producer of shrimp and scampi with roughly 800,000 tonnes, nearly half of India’s total production, in fiscal year 2025. West Bengal was second with 73,000 tonnes, followed by Gujarat with 62,000 tonnes and Odisha with 52,000 tonnes.
There are more than 500 seafood export processing companies in India. In Andhra Pradesh they operate in Visakhapatnam, Nellore, and Bhimavaram. Major exporters include Avanti Feeds, Devi Seafoods, Sandhya Aqua Exports, Falcon Marine, and CP Aquaculture India. Most of the major exporters of white-leg shrimp own the entire chain, from hatcheries and farming to processing and export.
Kerala is a tiny shrimp producer with an annual output of about 1,800 metric tons, though it has a long coastline. There is marine trawling for wild-caught deep-sea shrimp, from the Arabian Sea’s Wadge Bank trawl fishery, which are exported to Southeast Asia and Japan. Also, there is shrimp farming using backwater and estuary systems, like the Vembanad Lake and Ashtamudi, and in low-lying farms along the coast, particularly in Kollam and Alappuzha districts.
Unlike the large scale white-shrimp farms operated by major exporters, ponds in Kerala are small, less than two hectares, and traditional “trap-and-hold” ponds, promoting eco-friendly practices. In Andhra too, with a coastline along the Bay of Bengal, there are some small shrimp farmers.
Farm-gate prices for shrimp in Andhra have plunged further than in other parts of India. In addition to the drop in US demand, an outbreak of diseases in the state has wiped out nearly 80 per cent of the current season’s shrimp cultivation, according to Kotak Securities, an Indian investment bank. Only 100,000 acres of shrimp ponds are under cultivation, down sharply from the usual 600,000 acres.
(Photo: Wild Tiger shrimp. Courtesy Wikimedia Commons.)
In the US, restaurants, including large chains such as Red Lobster and Applebee’s, account for around 40 per cent of all shrimp consumed. As prices have risen, due to the 50% additional tariff on Indian imports, some of them have raised prices on shrimp dishes to maintain their level of profitability. Others have raised prices as well as reduced the number of shrimp they serve. Some independent restaurants, who do not have the purchasing power of the large chains, have stopped serving shrimp.
A policy intended to protect American shrimp producers has resulted in higher prices for US consumers and caused significant economic harm to millions of laborers and small farmers in India.
Due to the additional 50 per cent tariffs, in the current fiscal year, India’s exports of shrimp to the US is forecast to drop by a fifth, in both volume and value terms, according to Crisil Ratings, a credit rating agency.
Responding to the additional US tariff, the Indian government introduced measures to support the shrimp industry. These include cheaper, bigger loans for setting up processing plants, cold chains, and export hubs and grants for research and development. Together, these policy initiatives aim to reduce production costs by ten to fifteen per cent.
Shrimp farmers and exporters in India should assume that the additional 50 per cent US tariffs will remain in place. Existing markets, like the UK, China, and Russia, could together absorb only about 20 per cent of displaced US volumes, notes Crisil Ratings. Also, the profit margins on Indian exports to China and Russia are lower.
Exporters should pursue selling more value added and premium products, whose demand is less sensitive to price. Currently less than 10% of shrimp exports are value added, peeled, de-veined, and cooked, an Indian official told S&P Global Commodity Insights.
In premium products, India has a long way to go as seen from the experience in the European Union, a major market which imports roughly half a million tonnes of shrimp a year. In fact, sarting in September 2026, Indian exporters risk losing their entire 100,000 tonnes of annual shrimp sales to the EU, since India will not be on the approved list of animal protein providers because of the use of antimicrobials. The Indian government plans to shortly ban its use and thus meet the EU requirements. Yet, trying to meet a deadline at the last minute is an odd business policy given that, for nearly a decade, EU studies have found antimicrobials in Indian shrimp imports.
In addition to avoiding use of antimicrobials, to attract premium buyers in the EU and other Western markets, more Indian farms and exporters need to qualify for certifications like the Aquaculture Stewardship Council, all natural, enhanced traceability, sustainable water usage and eco-friendly packaging.
Equally important, Indian producers need to pay proper wages and establish humane working conditions, sought by influential consumer groups in the West. This is good business strategy: typically, premium prices received by reputed food exporters in developing countries, even in labor intensive businesses, more than compensates for their higher labor costs.