US senators push ‘India Shrimp Tariff Act’ as trade frictions threaten Indian seafood exports

US lawmakers are sharpening their focus on India's seafood exports, with Republican Senators Bill Cassidy and Cindy Hyde-Smith introducing the India Shrimp Tariff Act last week on Sept. 18 , a move aimed at countering what they call the "dumping" of cheap shrimp and catfish into the US market.

The proposed legislation comes at a critical juncture for India-US trade relations. Just days earlier, President Donald Trump and Prime Minister Narendra Modi signaled a thaw in their tariff dispute and pledged to restart stalled trade talks.

However, the shrimp bill, if passed, could harden positions on both sides, given the economic stakes for India's aquaculture sector, which supplies over 40% of the shrimp consumed in the US.

Shrimp export pressure

India exported $5.17 billion worth of shrimp in FY 2024-25 (April-March), according to the Marine Products Export Development Authority, with the US and China as the top destinations. Andhra Pradesh alone accounts for roughly 80% of India's shrimp exports.

However, Indian shrimp exporters are already reeling from Trump's decision in August to double tariffs on Indian goods to 50%, a move that could shave 0.5-0.6% off India's GDP growth this year, according to India's Chief Economic Adviser V. Anantha Nageswaran.

Additional targeted duties under the Shrimp Tariff Act could further erode India's cost advantage against competitors like Ecuador and Vietnam, which face duties closer to 20%.

Shares of key Indian shrimp companies fell sharply on Sept. 22, with Avanti Feeds down 2.5% and Apex Frozen dropping nearly 3.5% as investors assessed the risk of additional US restrictions.

"The US market is our single-largest destination, and losing pricing competitiveness there would be very difficult to offset elsewhere," said a senior executive at a major Indian aquaculture firm, requesting anonymity. "China and Europe can absorb some of the volume, but not at the same margins."

Trade negotiations hang in the balance

The shrimp legislation follows another bill introduced by Cassidy in February -- the Prioritizing Offensive Agricultural Disputes and Enforcement Act -- aimed at shielding Louisiana's rice industry from cheap imports from India and China.

Analysts say the new shrimp measure could complicate scheduled trade talks in Washington, where India's chief trade negotiator Rajesh Agarwal is expected to lead discussions on tariffs, agriculture market access, and supply chain security.

"This bill is as much about domestic US politics as it is about trade," said a Washington-based trade analyst, adding, "Cassidy is under pressure from Gulf Coast shrimpers, but the timing risks hardening India's stance when negotiators are trying to de-escalate tensions."

Compliance and food safety rules loom

The legislation could also dovetail with another bipartisan effort, the Safer Shrimp Imports Act, which would tighten food safety and inspection standards for imported shrimp, potentially raising compliance costs for Indian exporters.

Indian producers already face strict pre-export testing from the EU for banned antibiotics. Adding US inspection requirements could mean additional certification, traceability systems, and plant upgrades investments that some smaller processors may struggle to make.

Platts, part of S&P Global Energy, assessed CIF New York PDTO IQF 16-20 count/lb shrimp at $4.90/lb Sept. 19, or $10,803/mt, down 5 cents/lb, or $110/mt, from the last assessment.