US 25% Tariff Expected to Impact Seafood Exports from Andhra Pradesh

Currently, Indian exporters are subject to 10% tariffs along with an extra anti-dumping duty of 4.5% and a countervailing duty of 5.8%.

Following the US's announcement of a 25% tariff, exporters will encounter a minimum of 15% extra duty on top of the current tariff framework starting August 7.

Ecuador, India's nearest rival in seafood exports, faces a mere 10% tariff to the US, whereas Indonesia incurs a 19% duty and Vietnam a 20% charge.

Around 650,000 aquaculture farmers raise shrimp, crab, fish, and other species across 570,000 acres in Andhra Pradesh.

Worries

Coastal Economies Under Strain: Andhra Pradesh, a key seafood exporter, could experience local economic challenges that impact production, jobs, and logistics.

A decrease in shrimp demand can hinder cold chain infrastructure and related services, further diminishing export efficiency.

Decrease in Export Earnings: The U.S. represents 34.53% of the value of India's seafood exports.

Increased tariffs will render Indian seafood less competitive, resulting in reduced volumes and prices.

Potential Trade Redirection and Adjustment: Exporters might try to redirect their shipments to China, Japan, and Southeast Asia; however, these markets possess less purchasing power or have established local suppliers.

Adjusting to new markets will require time, during which export losses are anticipated.

India's Seafood Sector

India ranks as the second largest producer of fish, contributing approximately 8% to the total global fish production.

India primarily includes eight key states in fish production: Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, Tamil Nadu, and West Bengal.

India's seafood exports for 2024–25 hit $7.38 billion, totaling 1.78 million metric tonnes.

Frozen shrimp continued to be the leading export, representing 66% of revenue at $4.88 billion.

India's Seafood Sector

India shipped marine products to 132 nations, showcasing its wide influence in the international seafood industry. The leading five travel destinations are: United States, China, Japan, Vietnam, and Thailand.

Government Efforts to Enhance Seafood Exports:

Infrastructure Enhancement: The Marine Products Export Development Authority (MPEDA) provides support for improving processing plants, creating quality testing labs, and engaging in global trade exhibitions.

This contributes to improving the quality and competitiveness of Indian seafood items in international markets.

Aquaculture Assistance: This assistance involves the implementation of cutting-edge technologies and optimal methods to enhance production and efficiency.

Duty Reduction: In Budget 2024-25, the government has lowered import duties on key components utilized in seafood feed.

Main reductions consist of fully eliminating taxes on fish lipid oil, algal prime, crude fish oil, and pre-dust breaded powder.

Furthermore, import tariffs on krill meal, mineral and vitamin blends, and prawn/shrimp and fish feed have been drastically reduced.

Export Incentives: The government has improved the Remission of Duties and Taxes on Export Products (RoDTEP) program.

The refund rate for different seafood products has risen from 2.5% to 3.1% of the export value.

Pradhan Mantri Matsya Sampada Yojana (PMMSY): This primary initiative seeks to enhance the fisheries industry by advancing cold chain facilities, minimizing post-harvest losses, and boosting overall efficiency.

Conclusion

The updated U.S. tariff system could adversely affect India's trade balance, particularly in the near term.

Without intervention through bilateral trade discussions, export diversification, or tariff relief strategies, India's seafood industry could face declines in economic performance and trade competitiveness.