Relief for seafood and rice exporters

By Sandip Das

India’s seafood exporters have got a relief after a 90 days pause on US’s reciprocal tariff of 26% with lowering of the duty to 10%. This has put India’ seafood exports at par with its competitors including Ecuador in the US market.

Exporters said the reciprocal tariff of 26% from items from India would have hit the seafood exports to US just at the beginning of the season, as the farmers started preparation for the cultivation of shrimp, which constitute the biggest chunk of shipment.

“There is a lot of relief now as we are at par with other exporters to the US,” KN Raghavan, secretary general, seafood exporters association of India, told FE. He said the government must now negotiate with the US for entering into a bilateral trade agreement so that higher imports tariff does not hit again.

Earlier Indian industry had stated that imposition of tariff could have hit farmers, processors and other stakeholders in the chain as they had started preparation for shrimp cultivation. There were also fears of losing a portion of the market to Ecuador, which is closer to the US geographically as well as attracting lesser import duty at 10%.

Industry had also raised concern that as a portion of seafood exports from India is sent to south east Asian countries including Vietnam and Thailand where its re-exported to the US after value addition, higher tariff imposed on imports of these countries would have an impact on the trade

The seafood exports to the US was valued at $ 2.55 billion in FY24, out of India’s total exports of $ 7.38 billion. Frozen shrimp continue to be the principal item exported to the USA with a share of close to 92%.

Bulk of the country’s seafood exports to the US is ‘Vannamei Shrimp’, and in FY24, over 41% of India’s shrimp exports went to America, which was by far its largest market. The US exports only Atlantic Salman to India in small quantities where India has imposed a 30% duty.

The reciprocal tariff earlier had covered the major exporters to the US shrimp market, including Ecuador (10% ), Vietnam (46%) and Indonesia (32%).

Meanwhile, rice exporters were also expecting the shipments to increase after the removal of reciprocal tariff by the US. “This timely decision comes as a significant breather for exporters, allowing shipments already in transit to reach their destination without disruption and enabling finalisation of pending export deals,” Ranjit Singh Jossan, vice president, the Basmati Rice Millers and Exporters Association, Punjab

India’s aromati and long-grained rice exports to the US was 0.3 million tonne (MT) in FY24 against the total exports over 5 MT. In terms of value, basmati rice exports to the US $ 304 million in FY24.

The bilateral agri-trade between India and the US was around $6.6 billion in 2024, while India exported $ 5 billion worth of agri-goods against an import of only $ 1.5 billion.

Currently India imposes higher tariffs than the US, especially in agricultural products where it imposes a simple average tariff of 39% and a trade-weighted tariff of 65%, according to an ICRIER paper.

This article has been republished from The Financial Express.