Securing an FTA with the EU: Indian shrimp puts pressure on Vietnam's market share

Exports Accelerate Despite Tariff Barriers

Amid ongoing volatility in global seafood trade, India’s shrimp sector recorded impressive growth. In the first 11 months of 2025, India exported 734,593 tons of shrimp worth approximately USD 5.23 billion, up 10% in volume and 17% in value year-on-year. In October and November alone, export volumes remained above 75,000 tons per month, continuing to post positive growth.

This development suggests that U.S. tariff measures did not significantly reduce overall demand for Indian shrimp, but rather redirected trade flows toward other markets.

Product Structure: Raw Shrimp Still Dominates

Export composition shows that raw whiteleg shrimp remained the mainstay, with over 562,000 tons exported (+9%). Value-added products reached 70,370 tons (+18%), while black tiger shrimp saw notable recovery in the second half of the year.

This reflects India’s familiar strategy: prioritize high volumes and competitive pricing to capture market share, then gradually expand into deeper processing. Such an approach allows exporters to flexibly pivot toward markets requiring large volumes of raw materials.

EU Emerges as a New Growth Destination

While exports to the U.S. declined due to higher tariffs, the EU became a bright spot. In the first 11 months of 2025, India’s shrimp exports to the EU reached 107,649 tons, up 38%—the strongest growth among major markets. During the same period, China imported 141,002 tons (+10%).

This shift indicates that Indian exporters are proactively reallocating markets rather than relying excessively on the U.S.

EU–India FTA: A Long-Term Strategic Boost

The most significant turning point came on January 27, 2026, when India and the European Union concluded negotiations on a Free Trade Agreement, paving the way for tariff reductions on most goods, including seafood.

According to European importers, once the agreement takes effect, import tariffs on Indian shrimp could fall substantially, making prices far more competitive compared to previous levels, when tariffs were relatively high. This is expected to give Indian shrimp a significant edge over competing suppliers such as Ecuador and Vietnam.

Although the agreement still requires formal ratification, it has already delivered a “market psychology” benefit, encouraging companies to sign long-term contracts, invest in farming areas, and expand EU-oriented capacity in advance.

U.S. Tariff Reduction: An Opportunity, but Not a Breakthrough

Alongside developments in the EU, U.S.–India trade relations have also shown positive signs, with U.S. reciprocal tariffs on Indian goods reduced from 25% to around 18%.

However, Indian shrimp remains subject to anti-dumping and countervailing duties, meaning effective costs have not fallen as sharply as hoped.

This implies that while U.S. demand may partially recover, it is unlikely to regain its position as India’s overwhelmingly dominant market. The EU is therefore expected to remain India’s strategic pillar in the coming years.

Strategic Direction of Indian Exporters

Based on recent developments, Indian exporters’ strategy appears to be taking shape along three key directions:

• First, diversifying markets by reducing dependence on the U.S. and prioritizing the EU and Asia.
• Second, maintaining price competitiveness through large-volume raw shrimp exports.
• Third, leveraging the FTA to secure long-term contracts and strengthen supply chains in Europe.

This approach allows India to safeguard export volumes while mitigating policy risks.

Vietnamese Shrimp Under Intensifying Competitive Pressure

For Vietnam, India’s strategic shift creates direct competitive pressure, particularly in the EU—a market where Vietnam has traditionally enjoyed advantages under the EVFTA.

If Indian shrimp benefits from equivalent or lower tariffs, its price advantage—backed by large-scale farming and lower production costs—will become more pronounced. Consequently, competition in the raw and mid-range segments in the EU will intensify.

Nevertheless, Vietnam retains strengths in deep processing, value-added products, high quality standards, traceability, and sustainability compliance.

Vietnamese Shrimp Enterprises: Upgrading Value to Sustain Long-Term Advantage

As India expands its presence in the EU and gradually recovers market share in the U.S. through new trade agreements, competing directly on price or volume will become increasingly difficult for Vietnamese shrimp enterprises. Instead, the appropriate direction is to increase the share of value-added products, reduce dependence on frozen raw shrimp, fully leverage EVFTA tariff preferences and stable EU trade relations, and expand into other markets such as Japan, South Korea, and CPTPP member countries.

At the same time, strong investment in sustainability standards, ESG practices, traceability systems, and “green” certifications will become key strategic differentiators.

India’s shrimp story in 2025–2026 demonstrates its rapid adaptability to policy shifts: losing advantages in one market but swiftly pivoting to another, while leveraging FTAs to prepare for a new growth cycle.

For Vietnam’s shrimp exports, this represents both a challenge and a reminder to upgrade the growth model. In the coming period, competitive advantage in the shrimp industry will no longer lie in scale or low costs, but in added value, branding, and sustainable quality—factors that will determine the long-term position of Vietnamese shrimp in the global market.