Mumbai: India’s shrimp export industry is undergoing a marked shift as exporters reduce their reliance on the United States (US) and expand into new geographies, while also increasing the share of value-added products to sustain growth. A recent report by CareEdge Ratings highlights how exporters are adapting to tariff challenges in the American market by diversifying their destinations and product mix.
During the first five months of FY26, non-US markets accounted for 86 per cent of the incremental export value, underscoring the scale of the pivot. Overall exports rose 18 per cent year-on-year in value terms to reach $2.43 billion, with shipment volumes increasing by 11 per cent to 348,000 metric tonnes.
While exports to the US grew by a muted 5 per cent, demand from countries such as Vietnam, Belgium, China and Russia surged, lifting non-US export values by 30 per cent to $1.38 billion compared with $1.06 billion in the same period last year.
Vietnam has emerged as a key re-export hub, while Belgium has benefited from improved compliance with traceability standards. Together, these markets have helped raise the non-US share of India’s shrimp exports to 57 per cent, up from 51 per cent a year earlier. This shift reflects a deliberate strategy by exporters to reduce dependence on the US, which has long been India’s largest buyer but is now a more difficult market due to tariff pressures.
Since early FY26, higher tariffs have eroded India’s price competitiveness in the US. CareEdge notes that India’s effective tariff rate stood at around 18 per cent between April and August 2025, compared with 13–14 per cent for competitors such as Ecuador and Indonesia.
Following the imposition of reciprocal duties on August 27, 2025, India’s effective duty surged to 58 per cent, while competitors faced rates between 18 and 49 per cent. This disparity has had a direct impact on shipments, with exports to the US falling by 35 per cent in August compared with July.
Priti Agarwal, senior director, CareEdge Ratings, said the industry must accelerate bilateral trade agreements and strengthen compliance frameworks in areas such as traceability, sustainability and cold-chain infrastructure. “Developing a future-ready shrimp sector requires moving beyond reactive export strategies and focusing on building a geopolitically balanced and demand-driven supply chain,” she noted.
Exporters are also betting on value-added products to cushion margins. Globally, value-added shrimp exports grew 27 per cent during the period, with non-US markets recording a 78 per cent increase. This trend is expected to reduce reliance on commodity-grade exports and improve profitability.
CareEdge projects a moderation in operating margins by 150 basis points in FY27, but the growing share of value-added products, partial cost pass-through and softer farm-gate prices are likely to provide some relief.
The report suggests that Indian exporters are taking proactive measures to mitigate the impact of US tariff headwinds. Approvals for exports to the European Union and Russia have increased, opening up new opportunities. At the same time, the industry is focusing on compliance and sustainability to strengthen its position in these markets. The emphasis on diversification and product innovation reflects a broader effort to build resilience in the face of global trade uncertainties.
India’s shrimp industry has long been a critical component of the country’s seafood exports, and the current shift marks a significant departure from its traditional US-centric strategy. By expanding into new geographies and investing in higher-value products, exporters are positioning themselves for more balanced and sustainable growth. The challenge will be to maintain momentum in these markets while continuing to navigate tariff pressures in the US. For now, the pivot appears to be cushioning the industry against immediate headwinds and laying the groundwork for longer-term resilience.
No comments:
Post a Comment