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Amid US President Donald Trump’s tariff announcements, Andhra Pradesh Chief Minister N Chandrababu Naidu has written to the Centre, seeking help for the state’s fish farming products.
Naidu has requested that the central government — of which his party TDP is an ally — ensure that products like shrimp are exempt from additional duty.
Why has Naidu taken this step?
Andhra Pradesh is a major exporter of shrimp and fish to the US. Aqua farmers and shrimp and fish exporters operate with 5 to 6 per cent profit margins, according to officials. The Trump administration has levied a 27 per cent tariff on aqua exports from India, which will come into effect this week, apart from a 5.77% countervailing duty and a 1.38% anti-dumping duty imposed by the US Department of Commerce. This will drastically increase the cost of exports.
On the other hand, countries that compete with India, especially Ecuador, face less tariffs, with the US imposing only 10 per cent tariff on the South American country. This will harm the interests of Indian aqua farmers.
How will tariffs impact the aquaculture industries?
To compensate for the new tariffs, aqua products exporters will have to increase prices. This will make shrimp and fish from India more expensive compared with countries like Ecuador, Vietnam, and Taiwan.
If exports dip, Indian farmers will have to curtail production. More than 5 lakh aqua farmers operate in Andhra Pradesh, a majority of them in the erstwhile undivided East and West Godavari districts. These farmers and their families will bear the brunt if the state is forced to curtail production. Prices of shrimp and fish will drastically come down, affecting the profit margins of the farmers. Jobs in allied industries, like cold storage, fish processing, and packaging will also be impacted.
How big is the aqua industry in Andhra Pradesh?
Andhra Pradesh leads the country in aqua production. In 2023-24, it contributed 0.94 million tonnes — 76% shrimp and 24% fish — to the national 1.84 million tonnes output.
Aquaculture took off in the state in the last two decades, with ample support and subsidies from governments. After the state was divided in June 2014, both TDP and YSRCP governments encouraged the industry. Thanks to this, thousands of agriculture farmers in the Godavari and Krishna region and Nellore converted lands into aqua farms (ponds), farming mainly various varieties of shrimp. The aquaculture has created ancillary industries like cold storages, processing centres, and packaging centres, providing jobs to thousands.
According to the central government’s Marine Products Export Development Authority (MPEDA), Andhra Pradesh exported 347,927 tonnes of seafood worth USD 2.369 billion in 2023-24.
As per the Union Ministry of Commerce and Industry, during the financial year 2023-24, India exported an all-time high of 17,81,602 MT of seafood worth US$ 7.38 billion (Rs 60,523.89 crore), of which frozen shrimp alone accounted for 92 per cent, much of which came from Andhra Pradesh.
The Naidu government has identified the aqua sector as one of the growth engines for achieving double digit inclusive growth. Last month, addressing the three-day Aquatech-2.0 conclave, CM Naidu had said that Andhra had about four lakh acres under aquaculture, and this should reach 10 lakh acres by 2029-30.
The contribution of the fisheries’ sector to the state GSDP is about 8 per cent.
Last week, TDP MP from Narasaraopet, L Sri Krishna Devarayalu, said in Parliament that around 11% of AP’s GDP comes from sea food and aqua exports, and about 8 lakh farmers are dependent on aquaculture directly and indirectly. The state earns Rs 3.5 billion from seafood exports per year, but now, Ecuador would be a major competitor to India, he said.
How big is shrimps’ share in India’s seafood exports?
The USA and China are major importers of India’s seafood. Of the US$7.38 billion seafood export in the financial year 2023-24, frozen shrimp, which earned Rs 40,013.54 crore (US $4881.27million), retained its position as the top item in the export basket, accounting for a share of 40.19% in quantity and 66.12% of the total dollar earnings.
The export of frozen shrimps during 2023-24 was pegged at 7,16,004 MT. The USA, the largest market, imported 2,97,571 MT, followed by China (1,48,483MT), the European Union (89,697 MT), Southeast Asia (52,254MT), Japan (35,906MT), and the Middle East (28,571 MT). Black Tiger shrimp, Scampi, Vannamei shrimp, frozen squid, Surimi and Surimi Analogs, and frozen cuttlefish are mainly exported. Frozen fish, the second largest exported item, fetched Rs 5,509.69 crore (US$671.17 million), accounting for 21.42% in quantity.
