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The imposition of a 25% tariff by the United States on Indian products, as announced by former President Donald Trump, is poised to inflict significant economic damage upon the aquaculture sector in Andhra Pradesh, India. This sector, a vital contributor to the Indian economy, is heavily reliant on the export of shrimp and other seafood products to the United States. The tariff, slated to take effect on August 7th, will substantially increase the cost of exporting seafood from Andhra Pradesh to the US, potentially rendering it uncompetitive in the American market. The revised tariff structure will impose a cumulative burden of approximately 35% on Andhra Pradesh's aquaculture farmers who export their produce to the U.S.A. This figure includes the newly implemented 25% tariff, a 5.77% countervailing duty, and a 3.96% anti-dumping duty. The Seafood Exporters Association of India (SEAI) has voiced serious concerns about the detrimental impact of this tariff hike on its members, highlighting the potential for significant financial losses and disruptions to the supply chain. Andhra Pradesh's aquaculture sector is a sprawling industry, encompassing approximately 6.5 lakh aquaculture farmers cultivating shrimp, crab, fish, and other varieties across 5.7 lakh acres. The sector provides employment to nearly 50 lakh individuals involved in various activities, including pond management, laboratory operations, export companies, processing and packing units, hatcheries, feed companies, ice factories, and cold storage units. The economic well-being of these individuals and their families is directly tied to the health and sustainability of the aquaculture sector. The imposition of the 25% tariff poses a severe threat to their livelihoods. In the 2023-24 financial year, India's seafood exports reached 17,81,602 metric tonnes, generating a revenue of $7.38 Billion (₹60,523.89 crore). Andhra Pradesh contributed significantly to this figure, accounting for 9.52% Compound Annual Growth Rate (CAGR), worth around ₹19,428 crore, according to Joint Director (Aquaculture) Shaik Lal Mohammad. This demonstrates the critical role that Andhra Pradesh plays in India's overall seafood export performance. Marine Products Export Development Authority (MPEDA) officials have highlighted that India exports a diverse range of seafood products, including shrimp, frozen fish, frozen squid, cuttle fish, lobster, and crabs, to over 120 countries worldwide. This extensive global reach underscores India's position as a major player in the international seafood market. The United States is the primary importer of Indian seafood, accounting for a substantial 34.53% share in terms of US$. China follows with 18.76%, while Thailand, Vietnam, and Japan account for 7.77%, 7.41%, and 6.06% respectively. Given the United States' dominant position as the largest importer, the 25% tariff is likely to have a disproportionately negative impact on Indian seafood exporters, particularly those in Andhra Pradesh. The Andhra Pradesh State Aquaculture Development Authority (APSADA) Vice-Chairman Anam Venkata Ramana Reddy has stated that the government is actively exploring measures to mitigate the losses faced by aqua farmers in the state. These efforts may include seeking alternative export markets, providing financial assistance to farmers, and lobbying the central government to negotiate with the United States on the tariff issue. Aquaculture farmers have expressed deep concern about the future of the sector, particularly after the U.S. announced a 26% reciprocal tariff in April this year. The decline in shrimp prices in the international market has further exacerbated the situation, prompting many farmers to announce a crop holiday in order to minimize their losses. A. Veerraju, an aquaculture farmer from Kaikalur in Eluru district, has emphasized the unsustainable nature of continuing aquaculture operations while facing a 35% tariff in the United States, the primary importer of their produce. He has urged the central government to intervene and implement measures to safeguard the sector in Andhra Pradesh.
The implications of this tariff extend far beyond the immediate financial losses faced by farmers and exporters. The aquaculture sector is a complex and interconnected ecosystem, and disruptions in one area can have cascading effects throughout the entire value chain. Reduced export volumes could lead to job losses in processing plants, hatcheries, and feed companies, further impacting the livelihoods of millions of people. Moreover, the tariff could discourage investment in the aquaculture sector, hindering its long-term growth and development. The potential consequences include a decline in seafood production, increased reliance on imports, and a loss of competitiveness in the global market. The Indian government faces a significant challenge in addressing this issue. While seeking alternative export markets is a viable strategy, it may not be sufficient to fully offset the losses resulting from the US tariff. Negotiations with the United States to reduce or eliminate the tariff are crucial, but the outcome of such negotiations is uncertain. In the meantime, the government may need to provide financial assistance to aquaculture farmers to help them cope with the increased costs of exporting to the United States. This assistance could take the form of subsidies, tax breaks, or loans with favorable terms. The long-term sustainability of the aquaculture sector in Andhra Pradesh depends on a combination of factors, including effective government policies, technological innovation, and responsible environmental practices. The government must work closely with farmers, exporters, and other stakeholders to develop a comprehensive strategy that addresses the challenges posed by the US tariff and promotes the long-term growth and prosperity of the sector. This strategy should focus on improving the quality and competitiveness of Indian seafood products, diversifying export markets, and strengthening the resilience of the aquaculture sector to external shocks. The current crisis underscores the vulnerability of the Indian economy to trade disputes and protectionist measures implemented by other countries. It also highlights the importance of diversifying export markets and reducing reliance on any single country. The Indian government must actively pursue free trade agreements with other countries and regions to create new opportunities for Indian exporters and reduce the risks associated with trade barriers. Furthermore, the government should invest in research and development to improve the efficiency and sustainability of the aquaculture sector. This could include developing new technologies for fish farming, improving feed efficiency, and reducing the environmental impact of aquaculture operations. The challenges facing the aquaculture sector in Andhra Pradesh are not unique. Many other industries in India are also facing increased competition from foreign companies and pressure to reduce costs. The government must create a supportive environment for businesses to thrive by reducing regulatory burdens, investing in infrastructure, and promoting innovation. By taking these steps, India can strengthen its economy and become more competitive in the global market.
The situation in Andhra Pradesh also highlights the delicate balance between economic growth and environmental sustainability. The aquaculture sector has the potential to generate significant economic benefits, but it can also have negative impacts on the environment if not managed properly. The government must ensure that aquaculture operations are conducted in a sustainable manner, minimizing their impact on water quality, biodiversity, and other environmental resources. This requires effective regulation, monitoring, and enforcement. The government should also promote the adoption of best management practices by aquaculture farmers, such as using sustainable feed sources, reducing the use of antibiotics, and implementing water conservation measures. The long-term health of the aquaculture sector depends on maintaining a healthy environment. If the environment is degraded, the productivity of aquaculture operations will decline, and the sector will become unsustainable. The government must work closely with farmers, environmental groups, and other stakeholders to develop a sustainable aquaculture strategy that protects both the environment and the economy. The crisis in Andhra Pradesh also underscores the need for greater coordination between different levels of government. The central government, the state government, and local governments all have a role to play in supporting the aquaculture sector. Effective coordination is essential to ensure that policies and programs are aligned and that resources are used efficiently. The central government should provide financial and technical assistance to the state government to help it implement its aquaculture strategy. The state government should work with local governments to ensure that aquaculture operations are properly regulated and that environmental standards are enforced. By working together, different levels of government can create a more supportive environment for the aquaculture sector and help it to overcome the challenges it faces. In conclusion, the imposition of the 25% tariff by the United States poses a serious threat to the aquaculture sector in Andhra Pradesh. The tariff is likely to lead to significant financial losses for farmers and exporters, job losses in the industry, and a decline in seafood production. The government must take urgent action to mitigate the impact of the tariff and to support the long-term sustainability of the aquaculture sector. This requires a comprehensive strategy that includes negotiations with the United States, financial assistance to farmers, promotion of alternative export markets, investment in research and development, and effective environmental regulation. The crisis in Andhra Pradesh also highlights the need for greater coordination between different levels of government and a more sustainable approach to economic development. By addressing these challenges, India can strengthen its economy and create a more prosperous future for its citizens.
Source: Trump’s 25% tariff likely to hit seafood exports from A.P.