From Shrimp to Basmati: How US Tariffs Are Sinking India’s Agri Trade

New Delhi – A storm is brewing over India's agricultural and allied exports following a steep 18% reciprocal US Tariffs imposed by the United States. Trade talks with Washington are expected to be nothing short of a diplomatic tightrope walk, with significant implications for India’s economy, especially its farmers and export-oriented industries.

US Tariffs Shrimp Exports in Deep Waters

One of the hardest-hit sectors is India’s shrimp industry a major contributor to marine exports. In 2023, the US imported $6.6 billion worth of shrimp, out of which India contributed $2.4 billion. However, with the US imposing anti-dumping duty (2.49%), countervailing duty (5.77%), and now a reciprocal tariff of 26% which is now 18%, the total burden on Indian shrimp exports stands at a staggering 34.26%.

Compare that to Ecuador’s 13.78% total duty and Vietnam’s whopping 74.6% — and it becomes clear that India still holds a price edge over Vietnam, but risks losing ground to Ecuador. Vietnam, in a desperate bid to regain competitiveness, has even offered to bring its tariffs on US imports down to zero.

Indian exporters now face the grim possibility of slashing prices just to move consignments already in transit. Meanwhile, shrimp farmers and workers fear mass job losses and plummeting domestic prices that will do little to cushion the export blow.

Basmati Rice May Lose Aroma due to US Tariffs

Though the US isn’t known for its rice consumption, it is surprisingly the fourth-largest rice importer globally, bringing in 1.3 million tonnes annually. Indian Basmati rice mainly exported from Punjab, Haryana, Uttarakhand, and Western UP accounts for a significant share of the aromatic rice segment in the US.

In 2023, India exported $376 million worth of rice to the US, trailing only Thailand ($730 million). But with new US tariffs in play, American consumers might turn to domestically grown rice, sidelining premium imports like Indian Basmati.

To add fuel to the fire, Indian exporters already face geopolitical uncertainty in major Basmati markets like Iran, which is under the looming threat of conflict. Farmers, sensing the shift, may reduce Basmati cultivation in favor of less risky alternatives.

Agrochemical Exports at Risk

India has steadily emerged as a global player in agrochemical exports, shipping $1.47 billion worth to the US in 2022–24 alone. But the new 18% tariff threatens to erode this hard-earned competitiveness overnight. While China still dominates the agrochemical space, US restrictions on Chinese goods may create a small window of opportunity for Indian exporters though it's slim and uncertain at best.

Trade Negotiations

What makes the scenario even more delicate is the looming pressure from US agribusiness lobbies. With interest in penetrating India’s vast consumer base, these groups view crops like wheat, soybean, and maize as prime export targets.

US lawmakers have also repeatedly raised concerns about India’s Minimum Support Price (MSP) regime, which they argue distorts global prices. Any agreement that opens India’s agriculture sector to unrestricted US imports could spell disaster for millions of farmers. As such, Indian policymakers must tread carefully. The risks of bowing to pressure are simply too high both economically and politically.

Investor Confidence Takes a Hit

The ripple effects because of US tariffs are already dampening sentiment in India’s export-driven sectors. With the future of global tariffs shrouded in uncertainty, potential investors are likely to shy away from industries dependent on international trade.

Final Word

India stands at a critical juncture. The 18% US tariff is more than a trade policy—it's a warning shot. From seafood to rice to agrochemicals, the impact is real and immediate. The road ahead in trade negotiations is rocky, and any misstep could jeopardize the livelihoods of millions. As the world watches, India must fight for fair terms and protect its economic sovereignty.

Stocks That May Get Affected

• Avanti Feeds Ltd.

  
  

  • One of India's largest shrimp feed and frozen shrimp exporters.

  • Major exposure to US markets — any drop in exports will directly impact revenue and margins.

    
    

• Waterbase Ltd.

  
  

  • Engaged in aquaculture and shrimp processing.

  • Vulnerable to price cuts and loss of US contracts.

    
    

• Apex Frozen Foods Ltd.

  
  

  • Significant chunk of its revenue comes from US shrimp exports.

  • Already operates on thin margins; may face working capital issues due to unsold stock and low domestic prices.

    
    

• KRBL Ltd.

  
  

  • The world’s largest Basmati rice exporter.

  • Exports a significant volume to the US; tariff impact could reduce competitiveness.

    
    

• LT Foods Ltd. (Daawat)

  
  

  • Large presence in premium rice export, including the US.

  • Already facing margin pressures; further drop in US sales could impact profitability.

    
    

• Chaman Lal Setia Exports

  
  

  • Smaller player but heavily reliant on exports to premium markets.