Proposed India Shrimp Tariff Act Hikes Import Taxes Up to 40% By 2028, Funds Seafood Inspections

This bill, officially called the India Shrimp Tariff Act, sets up a multi-year plan to increase the import duties (taxes) on shrimp coming into the U.S. specifically from India. Congress is framing this as a necessary step to protect U.S. shrimp producers, who they argue are being unfairly undercut by heavily subsidized Indian imports. The core of the bill is a phased-in duty increase that will hit importers of certain Indian shrimp products starting in 2026 and fully phase in by 2028.

The Tariff Tightrope: What It Costs

If you’re a business owner importing shrimp from India, prepare for sticker shock. Currently, many warm-water shrimp imports enter the U.S. duty-free. This bill changes that dramatically. It mandates that the standard import tax rate (duty) on Indian shrimp will climb from its current rate to 10% in 2026, 20% in 2027, and finally hit 40% starting in 2028 (SEC. 4). This isn't just a slight bump; it’s a major cost increase that will almost certainly be passed down the supply chain, meaning the price of Indian shrimp on your grocery store shelf or in your favorite restaurant is likely heading up.

Beyond the tariffs, the bill adds a new layer of cost and complexity by changing how customs officials determine the value of that Indian shrimp. Instead of using standard international trade rules, they must appraise the value at no less than the average price shrimp sells for right off the boat here in the U.S. (the ex-vessel price) on the day it shipped (SEC. 4). This rule is designed to prevent foreign producers from declaring artificially low values to dodge taxes, but it adds an unpredictable element for importers who now have to track fluctuating U.S. market prices just to clear customs.

Inspection Fee: The $0.10/kg Tax

If you’re a consumer, here’s a new fee that will affect all imported shrimp, not just India’s: a flat fee of $0.10 per kilogram (SEC. 6). The President is mandated to impose this new duty on all imported shrimp across several common tariff codes. The money collected from this shrimp fee is earmarked for one specific purpose: funding inspections of both imported shrimp and imported catfish. So, while the tariffs are aimed at protecting U.S. producers, this fee is directly aimed at enhancing food safety inspections, which is a clear benefit for consumers who want safer seafood options.

What’s in Your Shrimp Cocktail? New Labeling Rules

For anyone who cares about where their food comes from, Section 5 offers a win for transparency. The bill updates country-of-origin labeling requirements for seafood. Crucially, it specifically mandates that “whole cooked shrimp and crawfish and cooked shrimp and crawfish sections” can no longer be classified as “processed food items” under existing regulations. This change means that cooked shrimp—think shrimp cocktail or frozen cooked shrimp—will now have to clearly display where they originated. This is a big deal for consumers who want to make informed choices, and it closes a loophole that previously allowed cooked seafood to bypass origin labeling requirements.

The Big Picture: Trade Tensions

By singling out India with escalating duties, the U.S. is essentially escalating trade tensions, which could prompt a response from India. Congress justifies this by citing India’s high tariffs on U.S. farm goods (up to 300%) and their alleged subsidies (SEC. 3). However, the U.S. Trade Representative (USTR) will have to navigate international agreements, specifically updating the U.S. Schedule of Concessions under GATT 1994, to ensure the U.S. stays compliant with global trade rules (SEC. 8). Ultimately, this bill is a clear attempt to use tariffs to level the playing field for domestic shrimp producers, but it introduces higher costs for importers and consumers while promising greater funding for seafood safety inspections.