US President Donald Trump announced a 26% import duty on goods from India on April 2, a decision that has landed like a thunderclap across Kerala’s seafood export sector. The hike, part of a wider global tariff restructuring, is expected to directly affect prawn shipments—a mainstay of Kerala’s marine trade with the US.
Exporters are already on edge. The US is a crucial market for Indian prawns, and Kerala sends a sizeable chunk of its frozen shrimp exports there. With the new duties coming into effect from April 9, there’s now a real concern that this could dent the sector hard—both in revenue and jobs.
What’s more troubling is the timing. According to K.N. Raghavan, secretary general of Seafood Exporters Association of India, between 1,000 and 2,000 containers of prawns from India are currently mid-sea.
If they don’t make it to American shores before April 9, the new tax will kick in. That, as per him, could mean an additional tax burden of ₹500–600 crore.
India isn’t alone in facing increased duties, but some countries are getting a softer blow. Ecuador, for instance, will face only 10% duty under the new rules.
In a market where pricing plays a major role, this gives Ecuador a visible edge.
Given that prawns form 92% of India’s seafood exports to the US, any price gap could push buyers to look elsewhere.
Kerala’s seafood sector wasn’t exactly sailing smoothly before this. The Kerala Economic Review 2024 paints a picture of decline.
In 2023–24, marine product exports from the state fell to 1.97 lakh metric tonnes, earning ₹7,231.84 crore—a 10% drop in quantity and 12.7% fall in value compared to the previous year.
Kerala’s share in India’s marine exports also shrank—to 11.05% by volume and 11.95% by value, slipping from 13.2% two years ago.
Frozen shrimp still dominates the export list, forming 33% of Kerala’s trade volume and nearly 49% of its value.
As per the Kerala economic survey stats FY24, Kerala exported 1.97 lakh Metric Tonnes (MT) of marine products worth Rs 7,232 crore in FY24, out of which 18,000 MT was to the US.
The top destinations? China, the EU, and Southeast Asia, with the US still a prized market despite growing hurdles.
Behind the export numbers are thousands of small-scale farmers, particularly in Kerala’s coastal belt. Many rely heavily on US-bound shipments to keep their farms running. If American buyers start preferring cheaper Ecuadorian prawns, Indian produce could be left behind. And if that happens, exporters warn, the impact could ripple right down to the ponds and co-ops that support local livelihoods.
As of now, there’s no word on whether a new trade agreement between India and the US is on the cards. Until then, the state’s prawn trade might be sailing into choppy waters.
