'Just managing': US tariffs leave Indian shrimp farmers struggling
NEW DELHI: R. Mahadevan, a shrimp farmer in southern India, is considering something no farmer wants to say out loud: stopping production.
Having already seen his monthly income shrink in recent years due to rising costs and stagnant demand, he said U.S. President
Donald Trump
's planned tariffs on Indian exports may push him to the brink.
"Already I am struggling, just somehow managing," said 48-year-old Mahadevan, adding that his income had fallen to below $200 a month from about $350 in 2018.
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Trump said in early April his government would impose a 26% tariff on all Indian exports, including the thousands of tonnes of shrimp Indian exporters ship to American customers each year.
Mahadevan is among the hundreds of thousands of Indian shrimp farmers bracing for the impact of Trump's trade wars and is worried the 26% tariff could make his product too expensive in the U.S. market, the top destination for Indian shrimp.
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"If I shut down my farm, the idle ponds and machinery will be ruined, and restarting will become more difficult," said Mahadevan in the town of Karhiripulum in Tamil Nadu state.
"But (I have) no other option, I cannot afford to sell my shrimp any cheaper."
Indian negotiators won a 90-day pause in the tariff increase, keeping the tariff on exports at 10% until July, while pushing for a broader trade deal with the United States by the end of the year.
But for the hundreds of thousands of farmers raising vannamei shrimp - a fast-growing species farmed in small saline ponds along the country's coastal districts - any increase in the cost of sending their product to the United States could put them out of business. There were 120,000 vannamei shrimp farmers in 2021, according to the latest industry estimates.
Shrimp accounts for 66% of India's seafood exports and are worth billions of dollars, according to the Ministry of Commerce and Industry. But the people cultivating them tend to be impoverished and rely on loans to set up their small businesses, making them particularly vulnerable to falling prices and global shocks, said the Prawn Farmers Federation of India.
While an exporting boom buoyed the shrimp industry at large in 2021, farmers said they did not benefit from the government subsidies made available to the large exporters they buy feed from and sell their shrimps to.
Troubled sector
India is the world's largest exporter of frozen shrimp, shipping more than 716,000 metric tonnes in the financial year ending in 2024, according to government data. Nearly 60% of India's shrimp exports - $2.9 billion worth - went to the United States in 2024, the data showed.
But the industry has been struggling. After peaking in 2021, shrimp exports have declined amid a glut in the world's supply, falling prices and repeated disease outbreaks, according to a report from the Global Shrimp Forum.
Indian shrimp farmers have also been grappling with the 7% duty the United States imposed on the sector in 2024 for countervailing and anti-dumping purposes, according to Siddharth Chakravarty, an expert on the fishing sector.
With the 7% anti-dumping and countervailing duty, as well as the 10% tariff, India's shrimp exports to the United States already face a 17% duty that could climb as high as 37% if Trump goes ahead with the higher tariff, said a trade analyst who asked not to be named.
"(India's shrimp) sector is already reeling from a global oversupply of shrimp, on one hand, and demand stagnation on the other," said Chakravarty.
"Now, a higher tariff could push it over the edge."
Mahadevan said he earns about a fifth less on a kilo of shrimp than he did three years ago, "whereas all costs - feed, labour, electricity, diesel - have increased too much."
"If shrimp prices go down further, my family will suffer surely," said Mahadevan, who has already had to delay his daughter's wedding and a house renovation.
The concern is that a steep U.S. tariff could wipe out profits entirely in a fragile industry, said Chakravarty. Shrimp farmers heavily rely on loans to cover their input costs - such as feed, electricity, diesel and land leasing - while output is sensitive to weather, seed quality and disease outbreaks.
"With margins near zero, even small changes can be catastrophic. Even a 1% additional tariff is salt in the already raw wound," said V. Balasubramaniam, general secretary of the Prawn Farmers Federation of India.
Farmers are now calling on the government for help, demanding interventions to reduce input costs and access to better markets and prices for their shrimps.
There appears to be some relief on the way.
The administration in Andhra Pradesh, India's top shrimp-producing state, has been subsidising power to shrimp farms since April and is urging the national government to sign a trade pact with the European Union to reduce the sector's reliance on the U.S. market, according to local media.
Balasubramaniam said feed manufacturers started offering small discounts to farmers in April after meeting with local officials in Andhra Pradesh but that these were merely "symbolic" given the discounts were much smaller than the fall in shrimp prices.
Meanwhile, exporters are rushing to sell about 40,000 tonnes of shrimp from last year's harvest that are in cold storage before the new tariff takes effect, according to a separate local media report.
Looking for new markets
Chakravarty said the over-dependence on the United States has helped create the crisis shrimp farmers now face.
"One market for one product yielded benefits for India's shrimp sector in the beginning. But that boom has ended," he said.
Expanding sales of shrimp at home would also help, said Balasubramaniam. That would require the government to invest in a national distribution network, including cold-chain logistics such as refrigerated transportation, he said.
"We have been reaching out to the national government to establish a strong domestic market, but so far it has been a piecemeal approach," Balasubramaniam said.
India's commerce ministry did not immediately respond to the Thomson Reuters Foundation's request for a comment.
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