Us Tariffs: Why Andhra’s Aqua Exporters Are Demanding 240-Day Loan Moratorium

This article examines why Andhra Pradesh aqua farmers/exporters are demanding a 240-day moratorium on loan & interest payments, what has caused their distress (including US tariffs), what relief measures are being requested, what past & current facts show, and what the implications are for the sector.

I borrowed ₹1,000 from my friend, for 2 months. After those 2 months, I had some other expenses, and couldn’t pay her back. So, I asked for a moratorium (suspension or postponement) on the loan amount. This is essentially what Chandrababu Naidu is seeking on loans borrowed by the aqua exporters in Andhra Pradesh. 

They are seeking a 240-day moratorium on loan & interest repayments, among other reliefs. But what pushed them into this crisis? Why are they unable to repay? What led the Andhra CM to demand this relief now?

Why are Andhra Pradesh's Aqua Farmers Suffering after US’s 50% Tariffs?

Andhra Pradesh is the powerhouse of India’s shrimp (aquaculture) exports. According to multiple recent reports:

• The state accounts for 80% of India’s shrimp exports and 34% of India’s total marine exports.
   
• These marine exports are valued at approximately ₹21,246 crore annually.
   
• The number of aquaculture farmer families is around 2.5 lakh, and the allied sectors (feed, processing, transport, market etc.) support about 30 lakh people in Andhra Pradesh.

The trigger of the crisis is the US imposing steep tariffs on shrimp imports from India. The cumulative duty now stands at (approx.) 59.72%, which includes:

• a 25% base “reciprocal” tariff,
   
• an additional 25% “penalty” tariff because India continues to import oil from Russia,
   
• plus 5.76% countervailing duty and 3.96% anti-dumping duty.
   

These high tariffs have made Indian shrimp exports uncompetitive in the US market. The fallout:

• About 50% of shrimp export orders from Andhra Pradesh have been cancelled.
   
• Nearly 2,000 containers being exported are facing a tariff burden of ~₹600 crore.
   
• Overall estimated loss for the sector is placed at (approx.) ₹25,000 crore.
   

These hardships are affecting farmers (who have invested in inputs, feed, labour), processors, exporters, transporters, the full aqua value chain.

Andhra CM Asked for a 5% GST Waiver on Frozen Shrimp

Because frozen shrimp exports are subject to 5% Goods & Services Tax (GST) even though they are for foreign buyers, Naidu has requested a waiver of this 5% GST on frozen shrimp (exports). 

Key facts:

• The tax in question (5% GST) is applied to frozen shrimp irrespective of destination because of packaging / pre-packaging rules in GST law. Exporters feel this adds to cost, especially in the current high-tariff scenario.
   
• The waiver is being sought as a temporary measure, to help reduce the cost burden until the market conditions normalise.

Andhra CM Requested a ₹100 Crore Fund from State and Central Government

To cushion the blow, Naidu has demanded a ₹100 crore corpus fund from the Centre (or joint State-Centre), for purposes such as:

• Establishing cold storage facilities, hygienic fish & seafood markets.
   
• Helping in logistics / transport of aqua products (including dedicated trains to move them).
   
• Providing small top-up support to fishermen, e.g. one-time Kisan Credit Card top-up loans (₹1 lakh) to fishermen.

This ₹100 crore is intended for both immediate relief (to mitigate losses) and building or improving infrastructure and enabling diversified markets.

What is Andhra Pradesh Shrimp Producers Coordination to Facilitate Direct Farmer-to-Market Supply Chains?

As part of his proposals, Naidu wants to establish or use a body called the Andhra Pradesh Shrimp Producers Coordination Committee. Key features:

• This committee is to streamline supply chains by allowing direct linkages between shrimp (and other aqua) farmers and markets / exporters, cutting out middlemen, reducing delays and costs.
   
• It aims to improve traceability, quality, cold-chain handling, processing, packaging, all of which become more costly under tariff pressure.
   
• Also intended to help in infrastructure coordination: cold storages, hygienic markets, handling, transport etc. to reduce losses in perishable products.

This is both a relief measure and a structural reform: to make the sector more resilient in future, less dependent only on export markets like the US which may impose unpredictable trade barriers.

Effect of Trump’s (approx.) 50% Tariffs on Aquaculture

Putting together the data:
 

Naidu emphasised that US tariffs have had the most severe impact on shrimp exports, with estimated losses of Rs 25,000 crore and approximately 50 per cent of export orders being canceled. Nearly Rs 600 crore in additional tariff burden has affected about 2,000 containers being exported.

These numbers are drawn from the state government’s communications and media reports. The sharp cancellation of orders, the high cost burden on those containers already shipped/being shipped, and the academic / industry projections all indicate that unless relief is given, many aqua farmers/exporters will become insolvent, some operations may shut, and allied sectors (feed, cold-chain, transport, packaging) will suffer losses / job losses.

What Chandrababu Naidu is Seeking: The 240-Day Moratorium & Other Reliefs

Given the distress, Andhra Pradesh CM has formally requested the Union Government for multiple relief measures. Key among them:

• 240-day moratorium on loan and interest repayments for aqua exporters and aquaculture companies. This means suspending both principal and interest payments for 240 days.
   
• Interest subsidies to reduce cost of borrowing or service of loans for exporters/farmers.
   
• Temporary waiver of 5% GST on frozen shrimp exports.

Besides these financial reliefs, other demands include:

• The ₹100 crore corpus fund for infrastructure, cold storage, hygienic markets, and supply chain improvements.
   
• Dedicated trains or improved logistics from South India to other regions for transporting aqua products.
   
• Diversification of export markets, via FTAs with EU, South Korea, Saudi Arabia, Russia etc.
   
• Promoting domestic consumption (awareness campaigns, fish / shrimp consumption) to reduce over-reliance on exports.

Conclusion

The situation in Andhra Pradesh’s aquaculture sector is serious. US tariffs of nearly 60% have severely squeezed competitiveness for shrimp exports, leading to massive losses (₹25,000 crore estimated), cancellation of half the export orders, and tariff burdens of ~₹600 crore on containers already shipped. For the farmers and exporters, profits are gone; many likely operating at losses or unable to honour obligations.

The 240-day moratorium on loan and interest repayments, along with GST waiver, interest subsidy, and infrastructure support are urgent lifelines being called for. Without such relief, the risk is not just financial distress but job losses, disruption in allied industries, and loss of market‐share globally. Diversifying export markets and boosting domestic consumption are longer‐term strategies, but the immediate stress demands immediate policy support.

If these demands are met (or even partly), they could restore cash flows, prevent defaults, allow farmers to survive the crisis, and preserve the export ecosystem. However, implementation (which banks, which loans, which exporters, how to monitor, how to compensate for GST waiver, etc.) will be challenging.
 

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