The world cannot seem to catch a break from tariffs. Whether it was the Labor Day tariffs or the newly enacted US duties on countries that utilize forced labor in their production processes, ranging from 10 to 12.5%, the cumulative effect has been relentless. Nowhere has this been more disruptive than in the seafood industry.
The most telling example is India, which was once America’s largest shrimp importer.
A New 10% Duty, Effective July 2026
The US Trade Representative, citing a fresh Section 301 investigation under the Trade Act of 1974, imposed a 10% ad valorem tariff on all Indian seafood products, effective July 15, 2026.
The official justification was not explicitly a “forced labor tariff,” but rather a countermeasure against India’s alleged “failure to effectively prohibit and remediate forced labor” in its export sectors, particularly in marine processing.
The US argued that this constituted an “unfair trade practice” that artificially distorted global labor costs and conferred an undue competitive advantage.
So, how has this impacted Indian seafood exports?
1. The price shock
Before July, Indian shrimp entered the US duty-free, aside from existing anti-dumping and countervailing duties averaging 3-6% on specific companies. The new 10% duty is stacked on top of those. To remain competitive against rivals like Ecuador, Indian exporters have been forced to slash their free-on-board prices by 8-9%, eating deeply into their margins.
2. The shift trade flows (July Onward)
With US orders becoming less profitable, Indian processors have pivoted over the past four months:
– Diverted volume to China and Asean: Exports to China have surged by nearly 30% since July. China is now absorbing bulk, lower-grade Indian shrimp that would otherwise have gone to US fast-food supply chains.
– The Japanese market: Japan has traditionally imported high-grade Indian shrimp. Now, Indian exporters are redirecting medium-grade products there at a 10-12% discount, undercutting Vietnamese and Thai competitors.
– Increased domestic consumption: A significant portion of US-bound catch is now being sold fresh locally, depressing local retail prices by roughly 5%.
3. Impact on processors
Indian seafood processors now face a double burden: the constant threat of US customs detentions due to labor documentation issues, alongside the guaranteed 10% tax on every container that clears the border.
This has proven untenable for many small and medium-sized exporters, who have simply ceased exporting to the US altogether. Instead, they are shifting their focus to West Asian and Southeast Asian markets, where compliance costs are lower, and clearance is faster.
Meanwhile, US importers are gradually reallocating their purchases away from India toward cheaper alternatives like Ecuador and Vietnam, further eroding India’s market share.
The long road ahead
India has formally challenged the 10% duty at the World Trade Organization, but dispute resolution is slow, likely taking two to three years.
While the tariff wars are far from over, one thing is already clear: by the end of this year, these duties will have permanently altered Asian meat and seafood trade flows. As the cost of doing business with the West continues to climb, Asian exporters are pushing deeper into regional markets to offset their losses and build new channels.
