The proposed increase in tariff by the US, along with additional financial penalties, is likely to impact shrimp export volumes by 7-9% this financial year, Crisil Ratings said on Friday.
Indian shrimp exporters face an unprecedented new challenge in the US market, which contributes close to 48% of their exports, Crisil Ratings Senior Director Rahul Guha said in a statement.
US President Donald Trump has announced 25% tariffs on India, plus a 'penalty' for its trade with Russia. The tariffs will come into effect from Aug. 7.
"With the proposed increase in tariff by the US, along with additional financial penalties, countervailing duty of 5.77% imposed last year and the existing anti-dumping duties, India will be one of the highest taxed major shrimp exporters in the US market," he noted.
In contrast, Ecuador, the largest shrimp exporter globally, faces just 10% tariff and countervailing duties of 3-4% in the US, he said.
The operating margin will also fall 50-100 bps due to the added cost burden of tariffs and their gradual pass through due to competition from Ecuador, Guha said.
Therefore, the credit profiles of shrimp exporters, already under pressure, will witness further challenges, he added.
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