India diversifies seafood export portfolio as US tariffs squeeze shrimp trade

India’s seafood exporters are accelerating efforts to reduce their reliance on the United States, expanding into new global markets as higher US tariffs dampen competitiveness. According to CareEdge Ratings, India’s shrimp sector continued to post healthy growth in the first five months of FY26, even as American demand softened.

Shrimp export earnings rose 18% year-on-year to $2.43 billion between April and August 2025, supported by an 11% increase in volumes to 348,000 tonnes. Much of this momentum came from markets outside the US, where export value jumped 30%, rising to $1.38 billion from $1.06 billion a year earlier. As a result, non-US destinations accounted for 57% of India’s shrimp shipments during 5M FY26, up from 51% in the same period last year.

The US, historically India’s dominant buyer, registered only around 5% growth, reflecting the impact of escalating trade barriers. Indian exporters had rushed shipments earlier in the year ahead of new reciprocal tariffs that took effect on August 27, 2025, causing an unusual mid-year spike. With that advance buying now over, shipments have begun to decline; exports in August fell 35% compared with July.

Indian shrimp entering the US is currently subject to a mix of higher reciprocal duties, existing anti-dumping margins and countervailing duties. The combined tariff load averaged 18% between April and August—already higher than the 13–14% faced by Ecuador and Indonesia. After the August increases, India’s effective tariff rate surged to 58%, while key competitors now face 18–49%, further eroding India’s price advantage in the US retail and foodservice markets.

Despite the pressure in its largest traditional market, India is gaining ground elsewhere. China remained India’s biggest non-US buyer, with purchases up 16%, supported by steady consumption and processing demand. Shipments to Japan held broadly stable, while Vietnam doubled its imports to $0.18 billion, reinforcing its position as a regional re-export centre. Belgium also recorded a twofold rise to $0.14 billion, aided by improving EU demand and better traceability compliance among Indian processors.

Non-US markets accounted for 86% of the incremental export value logged during the first five months of FY26, underscoring the growing importance of diversification as Indian exporters navigate a more challenging US tariff landscape.