It will result in a fall in realisations whilst exporters look to alter their product combine and scout for different export locations, the report by Crisil Scores mentioned.
Thus, revenues, which have been stagnant for the previous 4 fiscals, will decline 18-20 per cent year-on-year this monetary 12 months regardless of some cushion from a surge in shipments within the first quarter in anticipation of the tariff hike.
In FY25, India exported round USD 5 billion of shrimps, of which the US accounted for round 48 per cent.
Decrease revenues, coupled with the lack to move on the tariff burden to clients, will erode the working revenue margin by 150-200 foundation factors.
The mix of decrease revenues and subdued margins will weaken the debt safety metrics of gamers, following which their credit score profiles will come beneath stress. In response to the report, the US has lengthy been a most popular vacation spot for shrimp exporters resulting from simple market entry, increased progress prospects, higher revenue margin and repeat buyer approvals. It continued to be a most popular vacation spot regardless of anti-dumping and countervailing duties, and the current reciprocal tariff of 10 per cent in April 2025 as clients absorbed a portion of the tariff, the report added.
Nevertheless, it said that the rise in tariffs to over 50 per cent places India at a big aggressive drawback towards different nations like Ecuador, Vietnam, Indonesia and Thailand, most of which have tariffs lower than half that of India.
In consequence, India's shrimp exports to the US will grow to be unviable, and the export quantity will plunge throughout the remainder of this fiscal.
Indian shrimp exporters benefit from the benefit of an advanced home infrastructure and powerful distribution networks within the US, whereas manufacturing in different nations is just not anticipated to rise considerably within the close to time period, the report mentioned.
The flexibility of Indian processors to divert their shrimp exports to different markets such because the UK (as a result of India-UK free commerce settlement), China and Russia will assist quantity to some extent within the second half of this fiscal.
“The headwinds will impression processors and discourage farmers from persevering with to spend money on shrimp tradition. Farmers incur upfront prices for land lease, seed and feed. Moreover, investments in gear for aeration, electrical energy and total pond administration and biosecurity have considerably raised the manufacturing value,” Crisil Scores Senior Director Rahul Guha mentioned.
Falling enterprise quantity may even trigger working margin to plunge to its decadal low of 5-5.5 per cent this fiscal as a result of impression of the tariff plus levies, decrease capability utilisation resulting from lack of income and shrinking gross sales of value-added and huge shrimps, which have been largely exported to the US and fetched increased revenues and margin, the report mentioned.
Debt safety metrics will reasonable on decrease profitability, whilst working capital debt reduces resulting from decrease enterprise quantity.
as a Dependable and Trusted Information Supply“The credit score profiles of shrimp exporters targeted on the US market will face additional challenges after two sluggish years. The curiosity protection is prone to reasonable to three.3 occasions this fiscal from 4.8 occasions final fiscal because the revenue margin compresses. The monetary leverage, nevertheless, is anticipated to stay steady at 0.5 occasions,” Crisil Scores Director Himank Sharma mentioned.
