Andhra Pradesh is taking decisive action to support its shrimp farmers in the wake of increased tariffs imposed by the United States on Indian seafood imports. The state government is implementing a significant cut in power tariffs for aquaculture, aiming to alleviate financial strain and enhance the competitiveness of local shrimp farmers.
The U.S. tariff hike, which has seen import duties on seafood surge as high as 50%, has severely impacted Andhra Pradesh, a major hub for Indian seafood exports. The state contributes a significant portion to India's total seafood export value, with exports reaching 4,27,237 tonnes in 2023-24. This new tariff structure makes Indian shrimp uncompetitive, especially when compared to countries like Ecuador, Indonesia, and Vietnam, which face considerably lower duties.
The increased tariffs have led to a near halt in export operations, causing distress among shrimp farmers who are now forced to sell their produce in domestic markets at substantially reduced prices. Reports indicate a significant price drop, with shrimp counts typically destined for export fetching only Rs 180-Rs 250 per kg, a fraction of their usual export value. This situation has put the livelihoods of approximately 2.8 crore people engaged in aquaculture and allied sectors at risk.
Recognizing the severity of the crisis, the Andhra Pradesh government has stepped in to provide relief. The reduction in power tariffs aims to lower operational costs for shrimp farmers, who rely heavily on electricity for running aerators and pumping water in and out of their ponds. This measure is expected to provide much-needed financial respite and help sustain the aquaculture sector in the state.
Andhra Pradesh Chief Minister N. Chandrababu Naidu has been actively engaging with the Union government, urging intervention and negotiation with the U.S. government to exempt Indian aqua products from the steep tariffs. He has also highlighted the need to address the duty disparity with competitors like Ecuador, which undermines the competitiveness of Indian shrimp in its primary export destination.
In addition to the power tariff cut, industry leaders have requested relief measures such as interest waivers and extended repayment periods, as well as fast-tracking free trade agreements with countries like the UK. Alternative markets in Europe and China are also being explored to diversify export destinations and reduce over-dependence on the U.S. market.
The Andhra Pradesh Chambers of Commerce and Industry Federation has appealed to the central government for policy and financial interventions to protect shrimp farmers and exporters. They have proposed nationwide campaigns to promote prawn and fish consumption, operationalization of Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs), and addressing infrastructure gaps in cold chain, logistics, and certification support.
While the power tariff cut is a welcome step, the long-term sustainability of the shrimp farming sector in Andhra Pradesh hinges on diversifying markets, reducing production costs, and implementing policies that promote fair trade practices. The state government's proactive measures, combined with support from the central government and industry stakeholders, are crucial to navigate the current crisis and ensure the continued growth of this vital sector.
