News / India's cool chain players eye new markets as tariffs slash US exports

India’s refrigerated/reefer cargo owners and cold chain logistics providers are bearing the brunt of a 50% tariff imposed on exports to the US – with the exception of pharmaceutical and electronics products – since late August.

According to industry sources, Indian reefer volumes have declined by nearly 50% this month.

They claimed the cut was due to a double whammy – the tariff, plus cargo being held back by exporters to prevent their containers being trapped during the Thanksgiving/Christmas/New Year holidays in the US, given the average transit time of 35 to 40 days from Nhava Sheva to the east coast.

“Many shippers haven’t released containers picked up for cargo stuffing,” one reefer cargo forwarding specialist told The Loadstar. “There is a major lull in the market.”

The US has historically accounted for the largest share of Indian seafood exports, but the higher tariffs, relative to the main competitors such as China, Vietnam, Thailand, and Ecuador, have caused significant volume shocks in recent months.

According to available data, Indian seafood exports to the US fell 6% by value in the April-to-September period.

“With other duties, the effective tariff on Indian seafood products landing into the US goes up to 58.26%,” explained one industry observer.

Sources also claimed that, despite the widespread clamour at Indian government and industry levels for trade diversification to mitigate the impact, exporters have been unable to expand market access due to increased global competition.

Seafood products, mainly shrimp, have been a major component of reefer loads out of southern India, with Visakhapatnam in Andhra Pradesh State the major hub. Andhra exported some $2.5bn worth of seafood in fiscal 2023-24, data shows.

But as seafood exports to the US slow, local state authorities have been exploring other markets, especially the EU, Russia and Australia, to support the beleaguered sector. But sources do not expect any sort of quick alternative gains, given the nature of a trade that typically involves quality aspects.

And the slide is not limited to seafood exports, it runs through major industry verticals; overall, the value of Indian outbound trade has plunged 11.8% year on year this month, according to data

“Key segments such as engineering goods, petroleum products, gems and jewellery, apparels and textiles, organic and inorganic chemicals, pharmaceuticals, and plastic goods witnessed noticeable contraction, weighing down the overall export performance,” said SC Ralhan, president of the Federation of Indian Export Organisations (FIEO).

“The export contraction mirrors the broader global economic slowdown, marked by geopolitical uncertainties, subdued demand in multiple major markets and persistent volatility in commodity prices,” he added.

Meanwhile, in response to industry appeals, the Indian government doled out a $5bn “export promotion mission, a fiscal package to provide relief to exporters battling the impact of heightened US tariffs, which “reflects a pragmatic and forward-looking vision for India’s trade sector”, FIEO said.

“It’s a timely response to the structural challenges that have long blunted the competitive edge of Indian exports.”