US Tariffs: Andhra shrimp farmers stare at uncertainty, CM Naidu appeals to Centre

Hyderabad: The reciprocal tariffs imposed by the US have become a serious challenge for shrimp farmers in Andhra Pradesh.

Ecuador, which faces only a 10 per cent tariff from the US, will be able to offer more competitive prices, potentially undermining Andhra shrimp farmers' business.

A shrimp exporter from Andhra Pradesh told DH that Ecuador has already been presenting stiff competition to Indian suppliers in recent years due to its geographic advantage.

The new tariff structure, with lower rates for Ecuador compared to India, has created a double blow for Indian aqua farmers. More than 10 lakh families depend directly and indirectly on the shrimp sector in Andhra Pradesh, where aquaculture spans approximately two lakh hectares across the coastal districts of East and West Godavari, Krishna, Guntur, and Nellore.

In an effort to protect the state's aqua farmers, Chief Minister N Chandrababu Naidu recently has written to Union Commerce Minister Piyush Goyal, urging the Centre to engage in discussions with the US administration to include shrimp in the exemption list from duties. India exports shrimp to Japan, the USA, the Middle East, the European Union, and Southeast Asia.

Naidu emphasized that timely intervention by the Centre could safeguard the livelihood of lakhs of people dependent on the aqua sector. During the 2023-24 fiscal year, marine food products worth $2.55 billion were exported from India to the US, with shrimp accounting for 92% of these exports. Approximately 75% of India's shrimp exports originate from Andhra Pradesh.

In his letter to Goyal, the Chief Minister pointed out that exporters from India already bear a 5.77% Countervailing Duty (CVD). When all duties are calculated together, India faces a 20% duty disadvantage compared to Ecuador. Shrimp products already harvested for previous orders are currently in cold storage and at ports, and these too are now subject to increased duties under the new regulations.

Naidu further noted that Indian exporters face additional challenges in the European Union an alternative market, including 50% inspection rates and import duties ranging from four to seven percent. Meanwhile, countries like Vietnam benefit from a Free Trade Agreement (FTA) with the European Union, enjoying zero-duty access, effectively capturing the European market.

"Countries like Vietnam, Thailand and Japan procure seafood from India, process it and re-export to the US. But due to the new high tariffs on final products, even those countries are canceling their orders from India," Naidu stated in his letter. With cold storage facilities at capacity in the state, farmers are increasingly uncertain about where to store their harvested products. Moreover, due to the 27% heavy duty, exporters have stopped procuring farm products despite crops being ready for harvest.

"Hence, I make an appeal to the Centre to hold necessary discussions with the US Administration to include shrimp in the exemption list from duties," Naidu urged in the letter. Shrimp farmers typically harvest two to three crops per year.

Shrimp cultivation, introduced in Andhra Pradesh in the mid-1990s, has become an integral part of the local economy in the coastal districts of East and West Godavari, as well as parts of Krishna and Nellore. These shrimp farms have transformed the fortunes of lakhs of aqua farmers in the region who were previously dependent solely on traditional farming of paddy and other crops.

Many farmers, especially in the Godavari and Krishna districts, have converted their agricultural lands into more lucrative shrimp tanks, bringing significant wealth and prosperity to the region.