India’s shrimp export industry is facing a severe downturn after the U.S. hiked import tariffs to ~58.26% on Indian shrimp starting August 27, 2025. A Crisil Ratings report predicts that shrimp export volumes will contract by 15–18% in FY26, with revenues likely to decline 18–20% year-on-year.
Earlier estimates suggested volume might fall by 7-9%, before the full tariff impact is felt.
Key Numbers & Impact
| Metric | Pre-Tariff Status | Post-Tariff Projection |
|---|---|---|
| Volume decline | — | ~15-18% contraction in FY26 |
| Revenue decline | Shrimp exports were ~US$5 billion in FY25; U.S. accounted for ~48% of that. | Expected revenue drop of ~18-20% |
| Margin erosion | Indian exporters had been doing business with modest margins under prior tariffs. | Operating margins likely to shrink by 150-200 basis points due to inability to fully pass on tariffs to U.S. buyers. |
Why This Is Happening
- The new U.S. tariff (58.26%) + existing anti-dumping & countervailing duties make Indian shrimp disproportionately expensive compared to competitors like Vietnam, Ecuador, Thailand, etc.
- Indian exporters are finding it hard to pass on added costs to U.S. customers, which squeezes margins.
- Farmers & processors are burdened with high input costs (feed, seed etc.), which combine with tariffs to raise break-even prices.
Broader Implications
- Livelihoods: Shrimp farming employs millions of workers; declining exports could hit income and investment in aquaculture.
- Debt & Credit Stress: Shrimp exporters dependent on U.S. demand may face financial stress; credit ratings and debt coverage metrics may worsen.
- Export Diversification: Exporters will increasingly look to redirect shipments to alternative markets (EU, UK, Middle East, China, Russia) to compensate for reduced U.S. demand.
Caveats & What to Watch
- The 15-18% fall is a projection; short-term shipments (ahead of tariff enforcement) could buffer losses temporarily.
- Changes in U.S. policy (tariff reliefs, trade agreements) or Indian govt’s support (export subsidies, relief packages) could mitigate some damage. Reuters
- Shrimp product mix matters: larger, value-added shrimps fetch higher prices and are more lucrative—but also more impacted by tariffs and transport costs.
Conclusion
While some early reports suggested around 7-9% drop, more recent credible estimates from Crisil expect a 15-18% decline in Indian shrimp export volumes, with revenue falling 18-20% year-on-year in FY26 due to the U.S. tariff hike to ~58.26%. Though not exactly 12%, the figures point to a steep fall, and exporters will need to adapt fast.
