Even as the U.S. imposed steep tariffs of nearly 50% on Indian seafood—threatening a sector heavily dependent on American buyers—India managed an unexpected surge. Seafood exports rose 11.6% between April and September, signalling that exporters not only absorbed the tariff blow but leveraged it to aggressively seek new markets and restructure their export mix.
The U.S. Shock: A Threat to India’s Core Export Base
The United States has long been India’s most critical seafood market, buying 35–48% of marine exports, largely farmed vannamei shrimp. When Washington hiked duties—combining Trump-era tariff increases with existing anti-dumping and countervailing levies—the effective tax burden reached nearly 50–60%.
This rendered Indian shrimp significantly costlier than competing supplies from Ecuador, Vietnam, and Indonesia. Early forecasts predicted a sharp fall in export volumes and serious income risks for coastal states such as Andhra Pradesh, Gujarat, Odisha, and West Bengal, where shrimp farming is a primary livelihood.
Yet, against expectations, India posted year-on-year export growth, buoyed by rapid market and product diversification.
How Diversification Became the Comeback Strategy
India’s turnaround rests on three interlinked shifts: entering new destinations, creating a broader export basket, and leveraging supportive policy measures.
1. Expanding Market Footprints
India strategically reduced its reliance on a single buyer by targeting high-value and high-volume destinations:
· European Union imports jumped approximately 40% in value, with shrimp exports alone growing 57%, thanks to the approval of 102 additional Indian processing units.
· Russia expanded its approved-supplier list by nearly 25–29 plants following inspections, opening the door for more shrimp, squid, and cuttlefish shipments.
· China, Vietnam, and the UK drew larger volumes—China and Vietnam mainly for reprocessing and re-export, while the UK and EU served as premium markets.
This realignment allowed India to backfill lost U.S. orders with demand from multiple regions.
2. Broadening Species and Product Mix
India deliberately shifted away from a “US + vannamei shrimp” model. Exporters diversified into:
· multiple shrimp species,
· squid, cuttlefish, and other cephalopods,
· higher-value processed products such as cooked, marinated, breaded, and ready-to-eat seafood.
This multiproduct strategy reduced the vulnerability associated with relying on a single species and market.
3. Policy Tools to Enable Diversification
The government’s response was both immediate and structural:
· Lower import duties on brood stock, feed, and equipment reduced production costs.
· Job-work exemptions helped processing units stay competitive in newer markets.
· Quality and traceability upgrades—supported by MPEDA and the Export Inspection Council—helped exporters meet stringent EU and UK norms.
· Diplomatic engagements with the EU, UK, and Russia unlocked new approvals and expanded India’s export capacity.
· State-level initiatives, particularly in Andhra Pradesh, Tamil Nadu, Kerala, and Gujarat, focused on building processing hubs, cold chains, and packaging clusters to support non-U.S. market entry.
By strengthening compliance and infrastructure, India made its seafood more acceptable—and more attractive—to new buyers.
Why Exports Rose Despite the Tariff Blow
The combined result of these shifts was a dramatic easing of U.S. dependence. Losses from the American market were largely offset by better prices in Europe and the UK, higher volumes to East Asia, and new business in Russia. Although some alternative markets offer thinner margins, the broader base reduced systemic vulnerability.
By the first seven months of FY26, marine exports reached $4.87 billion, up over 16%, with 57% of shrimp exports going to non-U.S. markets—a historic shift.
A Crisis That Accelerated a Structural Transition
The U.S. tariff shock could have destabilised India’s seafood economy. Instead, it became a pivotal moment that sped up diversification long considered necessary but slow to execute. Through market expansion, product upgrading, regulatory diplomacy, and stronger quality frameworks, India has repositioned its seafood sector for greater resilience.
The result is a more balanced, multi-market export architecture—better equipped to withstand geopolitical swings, tariff shocks, and future supply disruptions.
(With agency inputs)
