Will Indian Shrimp Exporters Experience a Revenue Boost This Fiscal?

New Delhi, May 30 (NationPress) Indian shrimp exporters are set to experience a slight revenue increase of 2-3 percent this fiscal year (FY26), driven by enhanced realizations from rising prices and favorable currency fluctuations, according to a recent Crisil report.

While the low-value-added shrimp segment is likely to face mounting pressure, Indian exporters hold a competitive edge in the value-added category compared to other Asian nations such as China, Vietnam, Thailand, and Indonesia, which are subjected to higher tariffs yet command over one-third of the market in the US.

Nonetheless, export volumes are expected to remain stagnant due to anticipated increased tariffs from the US and muted demand from major importing countries as sluggish economic growth dampens disposable incomes.

Currently, India exports nearly 48 percent of its shrimp products to the US. Although reciprocal tariffs announced by the US are currently on hold, they are likely to favor South American exporters like Ecuador, the world's largest shrimp exporter. Indian suppliers may encounter intensified competition in the raw frozen and peeled frozen categories, which have lower value addition and profitability.

The report indicates that operating margins will be under strain as the tariff burden can only be transferred gradually and partially, similar to previous trends, as exporters explore alternative markets and enhance their offerings through value addition.

Credit profiles could face ongoing challenges as extended working capital cycles necessitate increased reliance on credit lines, potentially affecting debt protection metrics. Nevertheless, the report suggests that capital structures will remain stable.

“Last fiscal year posed significant challenges for Indian shrimp exporters due to rising prices and competition, especially after the imposition of a 5.77 percent countervailing duty by the US,” stated Himank Sharma, Director of Crisil Ratings.

This fiscal year, with the US imposing reciprocal tariffs amid sluggish economic activity in major markets like the European Union and China, exporters may experience stagnant demand.

“However, as realizations improve, overall revenue growth is expected to remain in the low single digits for this fiscal,” Sharma added.

Global shrimp demand has plateaued at 4 million tonnes over the past few years and is anticipated to remain subdued this fiscal year as well. Currently, Indian exporters hold approximately 20 percent of the global market share, while domestic production is projected to remain stable at 1.2 million tonnes due to non-remunerative global prices affecting shrimp farming and growth this fiscal.

Nagarjun Alaparthi, Associate Director of Crisil Ratings, noted that “Despite rising debt, the financial structures of shrimp exporters are likely to remain robust.”