From tariff shock to export success story
Few export sectors have staged a comeback as dramatic as India’s seafood industry over the past year. In 2025, the sector faced a severe setback when the United States, India’s largest seafood market, imposed cumulative tariffs of 50%, later rising to 55.8%. The impact was expected to be devastating, particularly for Andhra Pradesh, which dominates India’s shrimp exports and has historically depended heavily on the US market.
The numbers illustrated the vulnerability. In 2024-25, India exported seafood worth $7.45 billion, with the US alone accounting for $2.71 billion, more than a third of total exports. Exporters faced cancelled orders, squeezed margins and uncertainty over future demand.
Instead of collapsing, however, the industry adapted. The government, exporters and producers moved aggressively to diversify markets. Australia reopened access to unpeeled prawns from Andhra Pradesh after an eight-year ban. India regained significant ground in the European Union through compliance efforts and regulatory engagement. Russia emerged as another promising destination as non-tariff barriers were addressed.
The results were impressive. Seafood exports rose to a record $8.46 billion in FY26 according to data published in May. The latest figures released by the government show exports touching ₹73,890 crore or $8.46 billion in FY26, with shipment volumes reaching 1.97 million metric tonnes. Even as exports to the US declined, growth in China, the EU, Japan and Southeast Asia more than compensated for the losses.
China increased imports from India by 22.7% in value terms while exports to the EU surged nearly 38%. Frozen shrimp, the industry’s flagship product, continued to dominate export earnings, contributing over $5.5 billion.
The ambition gets bigger
The strong recovery has emboldened policymakers. Commerce and Industry Minister Piyush Goyal has said India’s seafood exports can grow 2.5 times to reach $30 billion within five years. The government has already concluded nine free trade agreements with developed countries in the past three-and-a-half years, potentially opening new opportunities for seafood exporters.
The ambition goes beyond simply exporting larger quantities of shrimp and fish. Policymakers increasingly want India to move up the value chain.
Currently, only about 12% of fish processing involves meaningful value addition. Much of India’s seafood is exported in relatively basic form and then processed further in countries such as China, Vietnam, Chile and Ecuador before reaching consumers. Andhra Pradesh Chief Minister N. Chandrababu Naidu has argued that this represents a significant missed opportunity because virtually every part of a fish can be used for nutritional, pharmaceutical or nutraceutical products.
The government is therefore pushing exporters toward ready-to-eat products, branded offerings and higher-value processing. Fisheries Minister Rajiv Ranjan Singh has called for raising value addition levels beyond 25%, comparable to China’s standards.
There are structural reasons for optimism. Global fisheries trade has expanded from $150 billion in FY14 to $164 billion in FY24. Rising global demand for protein-rich foods is creating new opportunities for seafood exporters. India’s production base is also strengthening, with Andhra Pradesh alone producing 5.539 million tonnes of aquaculture output in FY26 and accounting for 66% of shrimp exports.
The credibility problem
Yet just as the sector is celebrating its export success, a troubling signal has emerged. India’s drug regulator has stepped in after shrimp consignments faced a rejection rate of 43% in major overseas markets including the US, the European Union and Japan because of the presence of banned antibiotics.
The substances involved, chloramphenicol and nitrofurans, are among the most tightly regulated compounds in global food trade. Chloramphenicol is prohibited because even trace residues can trigger aplastic anaemia in humans. Nitrofurans are banned because their metabolites can persist in animal tissues and carry potential carcinogenic risks. Importantly, major markets operate on a zero-tolerance basis for these substances. Even minimal traces can lead to rejection of consignments.
Investigations traced contamination to more than 40 shrimp farms across four states. Andhra Pradesh accounted for 74% of the implicated farms, followed by Odisha at 13%, West Bengal at 8.7% and Gujarat at 4.3%. The Central Drugs Standard Control Organisation has now ordered states to intensify inspections of veterinary medical shops, strengthen enforcement of the ban imposed in March 2025 and initiate prosecution against violators where necessary.
Why this matters more than it appears
At first glance, the issue may seem limited to a few farms and shipments. In reality, it strikes at the heart of India’s seafood export strategy. One of the biggest achievements of the past year was the restoration of confidence among overseas regulators and buyers. The European Union’s decision to expand approval for Indian fisheries came after years of compliance efforts. Agencies such as the Marine Products Export Development Authority and the Export Inspection Council invested heavily in residue monitoring, traceability systems, disease control and quality assurance. These efforts helped position India as a reliable supplier at a time when global supply chains were being reshaped.
A spike in antibiotic-related rejections threatens to undo part of that progress. International buyers often evaluate suppliers not only on individual violations but also on broader perceptions of compliance culture. Repeated incidents can trigger enhanced inspections, slower clearances and additional testing requirements, raising costs across the industry.
The timing is especially problematic because India is attempting to expand exports in precisely those premium markets that maintain the strictest food safety standards.
The contradiction facing the seafood sector is striking. On one hand, India has demonstrated that it can diversify markets, withstand tariff shocks and expand exports even under adverse conditions. On the other hand, sustained growth now depends increasingly on meeting demanding regulatory standards rather than simply producing more seafood. Market diversification can reduce dependence on a single buyer, but it cannot reduce dependence on quality.
The government’s swift response suggests that it understands the high stakes. Directing tighter inspections, enforcing stock reconciliation and pursuing punitive action against violators are necessary steps. But the challenge extends beyond enforcement. It requires stronger traceability, better farmer awareness, tighter supply-chain monitoring and stricter controls on veterinary drug usage at the farm level.