Andhra Pradesh is the leading state in shrimp production and exports in India. About 70% of the total shrimp grown in the country comes from this state. Andhra Pradesh alone contributes about 32-33% of the value of seafood exports. West Godavari, East Godavari, Krishna and Nellore districts are known as shrimp production centers. This product is mainly exported to countries like America, Europe and Japan.
However, recently the US President Donald Trump has imposed a new duty of 25% on Indian shrimp. This comes in addition to the existing anti-dumping duties and countervailing duties, and the total duty has increased to 30-37%. Due to these heavy duties, the price of Indian shrimp is losing its competitiveness in the US market.
As a result, CM Chandrababu Naidu became the first NDA Chief Ministers to react on Trump tariffs stating that his government will take precautions considering the impact of the US tariffs imposed on India.“As the US has imposed 25% tariffs on India, we must take precautions considering the impact on agricultural exports,”he said.
Since countries like Ecuador, Vietnam and Indonesia are able to supply shrimp to the US at lower duties (10-13%), buyers are turning to those countries. This situation is having a serious impact on Andhra Pradesh. Exporters have reduced purchase orders due to reduced demand in the US market.
As a result, farmers in the state are being forced to sell at lower prices in the market. The export price, which normally ranges from Rs. 270- Rs. 300 per kg, has now fallen to Rs. 220- Rs. 230. This decline is causing a loss of Rs. 40- Rs. 50 per kg. Currently, about three lakh people in Andhra Pradesh are directly employed in shrimp farming, while a few lakh more are dependent on allied sectors like packing, processing, ice making, transportation and feed production.
Due to the fall in prices, farmers are at risk of being unable to recover their investments and getting into debt. If exports fall, processing units will also have to operate at lower capacity, resulting in job cuts. Keeping this situation in mind, the state government is considering measures like rebranding of shrimp, internal marketing and diversification of export markets to increase local consumption.
However, experts warn that since the US market is crucial to Andhra Pradesh’s shrimp industry, the impact of these tariffs could cause a significant blow to the state’s economy if they continue for a long time.