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Indian Express
2 days ago
- Business
- Indian Express
‘No one will purchase': Andhra shrimp farmers fear they could get priced out of US market
Andhra Pradesh's shrimp farmers are bracing for the impact of US tariffs that will touch 59.72% after US President Donald Trump announced 25% additional tariffs over and above the 25% announced earlier, as well as the 5.76% countervailing duty and 3.96% anti-dumping duty. 'If the US decides to go ahead with the additional 25% tariffs, many shrimp farmers will be forced to close down or cultivate other species that do not yield such high profits,' said S Lal Mohammad, joint director (aquaculture) of the Andhra Pradesh Fisheries Department. 'Medium and big farmers produce larger shrimp, known as 30-count or 40-count, referring to the number of shrimps per kilogramme. About 90% of the large shrimp are exported to the US and sell for Rs 350-400 per kg. Due to the heavy tariffs, exporters will avoid purchasing these,' he explained. India's seafood exports in 2024-25 reached $7.38 billion, amounting to 1.78 million metric tonnes. Shrimp formed the most significant component, accounting for 92% of India's seafood exports, and the US market alone accounted for over 40% of India's total shrimp exports. With extra tariffs being imposed, farmers would likely move towards growing smaller shrimp, such as the 100-count variety that sells for around Rs 220-230 per kg, which are generally not sent to the US, said Mohammad. Unless the tariff issue is resolved immediately, the whole sector will come to a standstill, secretary (Andhra Pradesh region) of the Seafood Exporters Association of India, D Dileep, said. 'We are talking of closure of operations of not only aqua ponds and farms, but also of hatcheries, shrimp processing units, packaging units, cold storages, and ice factories,' he said. Bracing for impact According to the government, there are around 6.5 lakh aquafarmers in Andhra Pradesh, and Dileep said that apart from them, around 30-40 lakh others involved at various stages of the industry could also face a dent to their livelihoods. He called on the state government to announce a package to help the industry absorb the impact. Andhra Pradesh produces sixty per cent of India's shrimp export. 'The US is a predominantly premium market. We supply to all its major super stores, and 40% of the shrimp in those stores are from Andhra Pradesh,' Dileep said. While the bulk of shrimp is exported from Andhra Pradesh, the other major supplier, Odisha, is similarly preparing for rough weather ahead. While Odisha exports seafoods, particularly shrimp, worth Rs 2,000 crore annually, over 30% consignments go to the US, industry sources said. Tara Ranjan Patnaik, chairman of Falcon Marine Exports, said the supply chain is already showing signs of disruption. The sector generates direct and indirect employment for around 15 lakh people in Odisha. Dileep pointed out that apart from the tariffs, the aquaculture industry is also facing particularly stiff competition from Ecuador, which is eating into India's share in the US market and is the other major supplied of shrimp to the country, apart from Indonesia, Vietnam and Thailand. 'Ecuador is nearer to the US, and the tariffs are only about 15%. It enjoys a huge advantage in terms of pricing, and it will be difficult for us to regain the US market if we lose out now,' Dileep said. Of the 241 aquaculture exporters in the country, 171 are based in Andhra Pradesh. The owner of Bhimavaram-based Pramadha Marine Exports Limited, Y Prasada Rao, said that due to various tariffs, most exporters are already operating at a 5-6% profit margin. 'Only the large exporters with big brand value operate with 10% margins. The rest get 5-6% profits. Only about 20% of aqua product exporters are able to export to the US, and the rest export to the EU, China, Russia, Vietnam, etc. With this increase in tariffs, the cost of products increases drastically. No one in the US market will purchase Indian aqua products at such prices. Due to this, exporters are facing tremendous losses. All operations are at a standstill,' Rao said. 'If we have to continue exporting, the entire burden has to be passed on to the aquafarmer. We have to purchase shrimp at reduced rates to offset the tariffs. Today, the situation is such that no exporter is willing to pay Rs 260 per kg for the small 100-count shrimp. All exporters have stopped purchases or taking orders till August 11, or at least till the issue is resolved and there is clarity,'' Rao said. An official of the Seafood Exporters Association of India stated that, as exporters are forced to increase prices, shrimp and other aqua products from India would become more expensive than those from competing countries. 'To put it simply, a shipping container with Rs 2 crore worth of aqua products will be charged more than Rs 1 crore in tariffs, increasing cost drastically. No buyer will purchase that, especially when other countries like Vietnam with lower tariffs can export,' said Venkata Kishore of SJ Marine Exports. Awaiting clarity Harsha Raju, a medium-level farmer and partner in Kolleru Aqua Farm in Eluru, said that since April, there has been a crop holiday situation. 'When the tariffs were announced first in April, it was a big blow to all aqua farmers. Traders and exporters are not offering good rates because they are taking the tariffs into consideration. We invest up to Rs 6 lakh per crop for shrimp, and if we do not get back even the investment, it is a huge loss. Right now, there is a crop holiday. We are all waiting for more clarity, and keeping an eye on what the Centre and state government do,' Raju said. Vice chairman of Andhra Pradesh's State Aquaculture Development Authority, Anam Venkata Ramana Reddy, said the state government is exploring various options to help aquafarmers. He said that about 6.5 lakh aquafarmers cultivate various sizes of shrimp, fish like catla, rohu, and seabass, as well as crabs. 'In 2023-24, aquaculture in Andhra Pradesh was cultivated in 5.7 lakh acres, out of which approximately 3 lakh acres were only for shrimp. As many as 8-10 lakh tonnes of shrimp and fish products were produced. Erstwhile undivided districts of Krishna, East Godavari and West Godavari account for 60% of the production,' Reddy said. 'We are holding discussions with aquafarmers on how to help them absorb the blow. Some farmers will stop cultivating the export variety and go for smaller shrimp, which will bring fewer profits. We are also looking at increasing exports to the European Union and Russia. We are encouraging domestic consumption, not only in Andhra Pradesh but also in other states,' Reddy said. Andhra Pradesh is also setting up the AP Prawn Producers Company, which will purchase shrimp from farmers and market it in smaller packets, like 50 gram and multiples of that, aimed at all income groups. 'The 50-gram packet will cost about Rs 50 and will have eight-nine pieces. It is affordable considering the increasing price of eggs,' Mohammad said. Anticipating the tough times ahead, Chief Minister N Chandrababu Naidu had in April written to the Centre to shield the state's aquaculture products and aqua sector from the heavy tariffs being levied by the Trump administration. And earlier this month, he said at an event, 'My government is providing support to aqua farmers by providing them electricity at Rs 1.50 per unit. The increase in tariffs by the US will burden aqua farmers in the state. We have taken it into consideration, and we act on it.'
India Today
6 days ago
- Business
- India Today
From seafood to auto: How will Trump's 50% tariff impact different sectors
US President Donald Trump's latest move to double tariffs on Indian exports to 50% has sparked concern across key export sectors. The tariff hike, set to take effect from August 27, follows a warning issued by Trump earlier over India's continued oil imports from move will hit key Indian export sectors, including seafood, textiles, gems and jewellery, and auto parts. The tariffs come as retaliation for India's oil purchases from new duties put Indian exporters at a major disadvantage compared to competitors from Bangladesh, Vietnam and other countries that face lower US tariffs. Several industry leaders have called the move "doomsday" for their businesses, with many now looking to shift manufacturing to other EXPECTED BUT STILL TROUBLINGSantosh Meena, Head of Research at Swastika Investmart, said the tariff increase was not unexpected.'The Trump administration has announced an additional 25% tariff on Indian exports, effective from 27th August. However, this move was largely anticipated by the markets, as President Trump had earlier hinted at such a development,' he added that there is still a window for discussions before the tariffs are implemented. 'A 20-day window remains for negotiations, with a US trade delegation expected to visit India on 24th August,' he said, calling the move 'part of Trump's aggressive negotiation strategy' aimed at pushing India into a trade THAT FACE THE FIRST BLOWAmong the worst hit are labour-intensive explained that, structurally, India's economy is driven more by domestic demand and has limited direct exposure to the US, except in sectors like IT, pharmaceuticals and electronics, which are not part of the new tariff list. 'However,' he warned, 'sectors such as textiles, gems & jewellery, and leather may face sentimental pressure in the near term.'Rahul Ahluwalia, Founder-Director of the Foundation for Economic Development, said, 'The main sectoral impact will be felt by labour intensive areas which do not have tariff exemptions like apparel, gems, jewellery and other such sectors where overall we have more than 30bn USD of exports to the US.'SEAFOOD EXPORTS STUNNED BY DOOMSDAY-LIKE BLOWOne of the most severely hit industries is seafood. The US accounts for almost 40% of India's total seafood exports, valued at around Rs 60,000 crore. Most of this is Kumar G, president of the Seafood Exporters Association of India, told The Economic Times, 'We are shocked. This is a doomsday for the seafood industry. It will have an effect on the farmers too.' He also said the sector will need help from the government to exporter from the west coast told ET that about 15% of the industry's annual sales are held in inventory at any given time, and this unsold stock could lead to big losses. With the next harvest season underway, farmers may stop seeding operations entirely out of AND APPAREL EXPORTERS PUT MANUFACTURING ON HOLDadvertisementTextile exporters from Tiruppur, Noida and Surat have decided to halt manufacturing for US orders. The uncertainty created by the steep tariff hike has made it impossible for them to price their goods competitively.A Sakthivel, Chairman of the Tiruppur Exporters Association, told ET, 'The increased tariff will definitely impact the textile and apparel exports for the next 30-40 days till such time that India works out a favourable Bilateral Trade Agreement with the US.'Sanjay Jain, past president of the Confederation of Indian Textile Industry (CITI), said it's a major blow to the sector. 'New orders will not come. Old orders will have to be shipped at a loss,' he told ET, adding that this could lead to unemployment in textile and leather Mehra, Chairman of CITI, said, 'The doubling of US tariff is a huge setback for India's textile and apparel exporters it will significantly weaken our ability to compete effectively vis--vis many other countries for a larger share of the US market.'advertisementIndia's exports to the US in this sector had already been falling since April. In contrast, countries like Vietnam and Bangladesh reported year-on-year growth of 26.2% and 44.6%, respectively, in June AND JEWELLERY INDUSTRY MAY SHIFT TO DUBAI, MEXICOThe gem and jewellery sector is also reeling. The US is the largest market for Indian diamond and studded jewellery exports, worth Rs 83,000 crore in 2024-25. The new tariff is pushing the industry to look at alternative manufacturing Bhansali, Chairman of the Gem & Jewellery Export Promotion Council, told ET, 'The 50% tariff is a doomsday for the Indian gem and jewellery sector. We have to find alternate ways to do business with the US.'Bhansali said exporters will explore rerouting their products through countries like Dubai and Mexico. 'We will set up manufacturing units there quickly. Dubai is the nearest destination for us. We will also look into rerouting studded jewellery through Mexico, if required,' he said, adding that all business will be done to media reports, Titan Company is also considering shifting part of its manufacturing to the Middle East to retain access to lower US explained how difficult things have become for the industry. 'When the tariff was 25%, the industry had thought of recalibrating margins. But now with a 50% duty, it has simply become impossible for us to survive.'A US jewellery industry delegation is expected to visit India on August 19 to discuss the matter with Indian industry bodies and the commerce PARTS INDUSTRY HIT HARDThe tariff increase will affect nearly half of India's Rs 61,000 crore worth of auto parts exports to the US. While India does not export vehicles to the US, components like those used in commercial vehicles, tractors and earth-moving machines will now attract 50% to ET, the US already had a 25% duty in place since May 3 on cars, trucks and parts from all countries. Now, the scope has been industry executive said, 'While the tariffs levied this year now impact component exports across categories, today's announcement specifically will hit nearly half of the total exports business to the US.'The US is the top destination for Indian auto parts, accounting for 32% of shipments in AND ECONOMIC GROWTH UNDER THREATSakshi Gupta, Principal Economist at HDFC Bank, told ET that if the tariffs remain, the impact on employment and investments could grow worse. 'The second-round impact on private capex, domestic manufacturing as well as labour markets could emerge as a key risk over the coming months,' she also pointed out that the job market was already weak in the first quarter of FY26, with labour-intensive sectors like gems, jewellery, textiles, leather and footwear likely to suffer overall unemployment rate stood at 5.6% in June, with urban joblessness at 7.1% and rural at 4.9%.MACROECONOMIC CHALLENGES LOOMMadan Sabnavis, Chief Economist at Bank of Baroda, said India must act fast. 'This is not good news as the total rate will now be one of the highest imposed by the US. The clue is to negotiate with the government soon,' he told added that India now faces the difficult task of managing both a drop in exports and a rising oil import bill. This may bring wider implications for the economy and have warned that if the tariffs remain in place, the country's GDP growth could take a hit. The government may need to step in with support for affected sectors, especially small businesses that form the backbone of these India awaits a US delegation later this month, much will depend on how both sides approach the negotiations. For now, exporters are hoping for a resolution before the new rates go live on August 27.- Ends
Economic Times
6 days ago
- Business
- Economic Times
Indian seafood industry stares at Rs 24,000-crore loss as Trump doubles India tariffs
Synopsis The Indian seafood export industry faces a potential loss of Rs 24,000 crore due to the US doubling tariffs to 50%. This move puts India at a significant disadvantage compared to competitors like Ecuador, impacting exporters and potentially farmers. The industry, heavily reliant on the US market, is seeking government support and exploring alternative markets to mitigate the effects. AP India seafood industry (Image for representation) The Indian seafood export industry is staring at a business loss opportunity of almost Rs 24,000 crore to the US due to the country's doubling of existing tariff to 50% on India. 'We are shocked. This is a doomsday for the seafood industry. It will have an effect on the farmers too,' said Pawan Kumar G, president, Seafood Exporters Association of India. 'We will need hand holding by the government,' he said. Ecuador, India's closest competitor for seafood exports, which is geographically closest to the US, will pay only 10% import duty in the US market, while Indonesia will pay 19% and Vietnam pay 20%. The US accounts for almost 40% of the total Indian seafood exports of Rs 60,000 crore. India mainly exports shrimps to the exporter from the west coast of India said as the industry has about 15% of annual sales as inventory at any given time, the exporters will face losses on this Indian industry employs an estimated 20 million people. As the seeding season for next harvest is currently underway, the industry fears that farmers may stop seeding operations. Executives said a lot will depend on how big buyers like Walmart and Costco negotiate with Indian exporters and how much margins they can pass. 'If this high US tariff continues where India is at disadvantage, Indian seafood exporters will have to make inroads into other markets,' another exporter said.
Time of India
6 days ago
- Business
- Time of India
Indian seafood industry stares at Rs 24,000-crore loss as Trump doubles India tariffs
The Indian seafood export industry is staring at a business loss opportunity of almost Rs 24,000 crore to the US due to the country's doubling of existing tariff to 50% on India. 'We are shocked. This is a doomsday for the seafood industry . It will have an effect on the farmers too,' said Pawan Kumar G, president, Seafood Exporters Association of India. 'We will need hand holding by the government,' he said. Productivity Tool Zero to Hero in Microsoft Excel: Complete Excel guide By Metla Sudha Sekhar View Program Finance Introduction to Technical Analysis & Candlestick Theory By Dinesh Nagpal View Program Finance Financial Literacy i e Lets Crack the Billionaire Code By CA Rahul Gupta View Program Digital Marketing Digital Marketing Masterclass by Neil Patel By Neil Patel View Program Finance Technical Analysis Demystified- A Complete Guide to Trading By Kunal Patel View Program Productivity Tool Excel Essentials to Expert: Your Complete Guide By Study at home View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Ecuador, India's closest competitor for seafood exports, which is geographically closest to the US, will pay only 10% import duty in the US market, while Indonesia will pay 19% and Vietnam pay 20%. The US accounts for almost 40% of the total Indian seafood exports of Rs 60,000 crore. India mainly exports shrimps to the US. An exporter from the west coast of India said as the industry has about 15% of annual sales as inventory at any given time, the exporters will face losses on this volume. The Indian industry employs an estimated 20 million people. As the seeding season for next harvest is currently underway, the industry fears that farmers may stop seeding operations. Live Events Executives said a lot will depend on how big buyers like Walmart and Costco negotiate with Indian exporters and how much margins they can pass. 'If this high US tariff continues where India is at disadvantage, Indian seafood exporters will have to make inroads into other markets,' another exporter said.
The Hindu
7 days ago
- Business
- The Hindu
Trump's 25% tariff likely to hit seafood exports from A.P.
With U.S. President Donald Trump announcing a 25% tariff on Indian products, the aquaculture sector in Andhra Pradesh is likely to be severely affected, causing significant losses to shrimp farmers whose produces are exported. The revised tariff imposed by the Trump administration will come into effect on August 7. Aquaculture farmers in Andhra Pradesh who are exporting their produce to the U.S.A. have to bear about 35% tariff, including 25% tariff, 5.77% countervailing duty and 3.96% anti-dumping duty from August 7, says the Seafood Exporters Association of India (SEAI) members. Approximately 6.5 lakh aquaculture farmers cultivate shrimp, crab, fish, and other varieties in 5.7 lakh acres in Andhra Pradesh. Nearly 50 lakh persons are employed in the aqua sector, including in ponds, laboratories, export companies, processing and packing units, hatcheries, feed companies, ice factories and cold storage units. During the 2023-24 financial year, India exported 17,81,602 metric tonnes of seafood worth $7.38 Billion (₹60,523.89 crore). The contribution of Andhra Pradesh was 9.52% Compound Annual Growth Rate (CAGR), worth around ₹19,428 crore, said Joint Director (Aquaculture) Shaik Lal Mohammad. 'India is exporting shrimp, frozen fish, frozen squid, cuttle fish, lobster, crabs and other products to more than 120 countries,' said Marine Products Export Development Authority (MPEDA) officials. The U.S. is the major importer of Indian seafood with a share of 34.53% in terms of US$, followed by China (18.76%), Thailand (7.77%), Vietnam (7.41%) and Japan (6.06%). Andhra Pradesh State Aquaculture Development Authority (APSADA) Vice-Chairman Anam Venkata Ramana Reddy on Tuesday told The Hindu that the government was making efforts to prevent losses to aqua farmers in the State. Farmers said the aqua sector in A.P. was facing a severe crisis after the U.S. announced 26% reciprocal tariff in April this year. As the price of shrimp had fallen in the international market, many farmers announced crop holiday, the producers said. 'We are not in a position to continue aquaculture by paying a 35% tariff to the U.S., which is the major importer of our produce. The Central government should take measures to save the sector in Andhra Pradesh,' said A. Veerraju, an aquaculture farmer from Kaikalur in Eluru district.
