India’s seafood, shrimp, and rice exports to the US face challenges as the Trump administration imposes a 27% reciprocal tariff. Ecuador may gain market share in seafood exports, while basmati rice could see reduced demand due to the tariff hike.

Written by Sandip Das

India’s shrimp and rice exports to the US are likely to be hit by the Trump administration slapping a 27% reciprocal tariff on imports from the country against earlier duty free imports.

Trade sources the US had a share of 35% of the country’s seafood exports of $ 7.3 billion in FY24 while India may lose market share to Ecuador, the largest seafood exporter to the US.

“With the imposition of duty, we would lose a chunk of the market to Ecuador, which is closer to the US geographically as well as attract lesser import duty,” KN Raghavan, secretary general, Seafood exporters association of India, told FE. He said because of immediate imposition of duty, the seafood exporters would bear the brunt especially for those consignment in the transit.

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%.

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

Stating that marine products exports, accounting for 40 -44% of India’s agri-exports to the US would be hardest hit, Shweta Saini, agricultural economist and founder and CEO of Arcus Policy Research said ,”shrimp exports from India would now faces tougher competition from Ecuador, where tariff stands at just 10%,”.

India’s rice and spices – chilli, coriander and curry powder – remain relatively insulated due to demand in-elasticity, Saini said.

“Indian basmati rice exports to high valu markets like the US may be impacted which may push American importers to seek alternative suppliers with more favorable trade terms,” according to Ranjit Singh Jossan, vice president, the Basmati Rice Millers and Exporters Association, Punjab.

Rice exporters say the disruptions in the Red Sea trade route and the Iran-US tensions and this additional tariff could result in substantial financial losses. “Many shipments are currently en route to the US, and the sudden tariff hike will directly impact exporters,” a rice exporter said …

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 both the countries 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.

Published Date: April 3, 2025