US tariffs bite, but India’s shrimp exports set to cross ₹50,000 crore; What’s driving growth?

India’s shrimp exports are expected to cross ₹50,000 crore in the current fiscal,rising 13–15% from a year earlier as exporters diversify into new markets and benefit from a weaker rupee, Crisil Ratings said on Monday.

The ratings agency said export volumes are projected to rise 6–7% this fiscal even as shipments to the United States declined due to higher tariffs.

“Revenue growth will be driven by higher realisations, stemming from sharp depreciation of the rupee against the dollar and euro,” it said.

An analysis of 63 shrimp exporters rated by Crisil indicates that operating margins are expected to remain steady at 7–7.5% this fiscal and the next.

Shipments to the United States fell about 15% in volume during the first nine months of the fiscal year.

As a result, the share of US-bound shipments is expected to fall to 32–33% this fiscal from about 40% last fiscal.

“Shrimp exports beyond the US have grown in double digits in the first nine months this fiscal,” Crisil Ratings Senior Director Rahul Guha said.

Export volumes to Vietnam rose 62% and to the European Union 43%, while shipments to China also grew in double digits, he said.

“Next fiscal, export volume is projected to grow 3-5% as supply improves, driven by an increase in aquaculture production by farmers in anticipation of higher demand, especially from the US owing to a likely reduction of tariffs to 15%, on par with other competing nations,” Crisil said. “Shipments to new markets will also aid growth.”

Crisil said free-trade agreements, faster approvals and improved market access to countries such as Russia and those in the European Union are likely to support further diversification of India’s shrimp exports.

The credit profiles of shrimp processors are expected to remain stable due to low long-term debt and limited capacity expansion plans, it added.

Interest coverage of rated companies is projected at 5–5.5 times this fiscal and the next, compared with 4.8 times last fiscal, while financial leverage is expected to remain healthy at about 0.7 times.

However, the agency said developments in the global economic environment, tariff policies and foreign exchange volatility “will bear watching.”