Shrimp Exports to Decline 15-18% in FY26 as US Tariffs Strike Industry

Mumbai, August 29, 2025 – India’s shrimp export volumes are expected to decline by 15-18% in FY26 following the United States’ hike in import tariffs on the commodity to 58.26% with effect from August 27, said Crisil Ratings. The action is expected to adversely hit realisations, forcing exporters to rework product mixes and search for new markets.

Revenues and Margins Under Squeeze

Industry revenues, which have been more or less stagnant in the last four years, are now projected to come down 18-20% year-on-year this fiscal. Exporters had witnessed a one-off spurt in volumes in Q1 FY26 as American consumers stocked up before the tariff increase, but analysts project the respite to be short-lived.

Operating margins too are going to contract steeply by 150-200 basis points to bring overall profitability to a ten-year low of 5-5.5%. Disappearance of high-value US orders, particularly for big and value-added varieties of shrimp, is the continuing main drag on performance.

In FY25, India’s shrimp shipments reached USD 5 billion, with the US alone contributing nearly 48% of volumes. Even with prevalent anti-dumping and countervailing duties, the US had continued to be the most remunerative market, providing scale and consistent repeat demand. Even the 10% mutual tariff in April 2025 was being partly taken by importers.

The recent tariff hike, however, made Indian shrimp non-competitive with the likes of Ecuador, Vietnam, Indonesia and Thailand, who still have appreciably lower duty hurdles to cross.

Search for Alternative Markets

With US demand set to crumble in the rest of FY26, exporters are now looking toward the UK, China, and Russia. The newly signed India-UK free trade pact is likely to offer a minor cushion, while China and Russia may assist in diversifying volumes. But analysts warn that these markets will not fully offset the substantial loss of US business.

Farmer Sentiment and Credit Risks

The shrimp farmers, who have high initial burdens of land lease, seed, feed, and pond facilities, are likely to defer investment during a softening demand environment.

Financially, debt shielding indicators are weakening. Interest coverage is likely to moderate to 3.3 times in FY26 from 4.8 times in FY25, while leverage is likely to remain at 0.5 times.

Crisil Ratings cautioned that muted margins, declining capacity utilisation, and weak sales will further stress the credit health of exporters and processors that have high exposure to the US market.

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