The diplomatic relations between China and Japan have soured, leading to a potential boon for Indian seafood exporters. China has reportedly notified Japan of its decision to suspend all seafood imports from the country, a move that could significantly shift demand towards alternative suppliers like India.
The decision comes amid increasing tensions between the two Asian economic powerhouses. New Japanese Prime Minister Sanae Takaichi's recent comments regarding potential military intervention in the event of a Chinese attack on Taiwan have sparked fury in Beijing. China, which claims Taiwan as part of its territory, has demanded a retraction of the remarks. The strained relationship has prompted Beijing to urge its citizens to avoid traveling to Japan, while Tokyo has advised its nationals in China to take extra security precautions.
China's suspension of seafood imports from Japan is officially attributed to the need for stricter monitoring of treated radioactive water released from the Fukushima nuclear plant. However, the timing of the ban, coinciding with the diplomatic spat, suggests a deeper connection. China had previously imposed a ban on Japanese seafood following the commencement of the water discharge in August 2023, only to partially ease restrictions earlier this month.
Before the initial ban in 2023, China, including Hong Kong, constituted over one-third of Japan's total seafood exports, based on 2022 data. In 2023, seafood shipments to mainland China accounted for 15.6% of Japan's total seafood exports, which totaled 390 billion yen ($2.5 billion), a decrease from 22.5% in 2022. This new ban could deal a significant blow to Japanese companies that were hoping to regain access to a market that once accounted for a substantial portion of their seafood exports. Nearly 700 Japanese exporters had applied to re-register for shipments to China, but only three had been approved to date.
For Indian seafood exporters, this development presents a potentially lucrative opportunity. Shares of Indian seafood companies have already shown positive movement, with Avanti Feeds closing up nearly 10% on Wednesday, marking its biggest intraday gain in over two months. Coastal Corporation also saw a climb of 5%. These companies have been actively seeking to diversify their export markets in response to challenges such as steep tariffs imposed by the United States, their largest market.
In April 2025, Coastal Corporation announced intentions to increase exports to China as part of a strategy of reducing reliance on the U.S. market. The U.S. administration had imposed tariffs of up to 50% on Indian shipments, leading to a nearly 9% year-on-year fall in exports to the U.S. in October. In light of these challenges, the Indian government recently approved a substantial spending package of 450.6 billion rupees to support exporters in labor-intensive sectors like textiles, jewelry, and seafood, particularly shrimp.
While it is still early to assess the full impact of China's ban on Japanese seafood, the situation highlights the intricate interplay of geopolitics and trade. For India, this could represent a valuable opportunity to expand its seafood exports and strengthen its position in the global market.
