Industry revenues, which have remained flat over the past four fiscals, are forecast to decline 18-20% year-on-year, despite a surge in shipments during the first quarter as exporters rushed consignments ahead of the tariff hike. India exported about $5 billion worth of shrimps in FY2025, with the US accounting for nearly 48%.
With exporters unable to pass on the additional costs, operating profit margins are likely to contract by 150-200 basis points, pushing them to a decadal low of 5.0-5.5%. Lower revenues and reduced margins will also weaken debt protection metrics, further straining the credit profiles of industry players, according to a Crisil Ratings analysis of 63 exporters covering about 55% of industry revenues.
“The headwinds will impact processors and discourage farmers from investing in shrimp culture,” said Rahul Guha, Senior Director, Crisil Ratings.
He noted that farmers face high upfront costs for seed, feed, aeration and biosecurity, while disease risks and falling realisations are already driving them toward lower-risk alternatives.
The US has traditionally been the most lucrative market for Indian shrimp exports due to its growth potential and repeat customer approvals, despite existing anti-dumping and countervailing duties. However, with tariffs now above 50%, India faces a sharp competitive disadvantage compared with rivals such as Ecuador, Vietnam, Indonesia and Thailand, where duties are less than half. This is expected to render Indian shipments to the US unviable through the rest of the year.
Some respite may come from redirecting shipments to markets such as the UK — boosted by the India-UK free trade pact — as well as China and Russia. Still, loss of premium value-added and large shrimp exports to the US is set to weigh heavily on revenues.
“The credit profiles of exporters heavily reliant on the US market will come under further pressure after two weak years,” said Himank Sharma, Director, Crisil Ratings.
Interest coverage for rated players is expected to moderate to about 3.3 times this fiscal from 4.8 times last year, though financial leverage is likely to remain stable at about 0.5 times, it added.
