*

India is biggest supplier of shrimp to US; 50% tariff hits

hard

*

Shrimp orders to US halted after tariff threat, exporters

say

*

Farmers in India look for other ways to make money

*

Ecuador sees potential to expand in US if India's exports

fall

By Rishika Sadam and Yury Garcia

HYDERABAD, India/GUAYAQUIL, Ecuador Aug 19 (Reuters) -

O n India's southern coast, V. Srinivas thrived for two decades

by farming shrimp, as the country became the top supplier of the

delicacy to the United States. Now, Donald Trump's 50% tariff

threat is forcing many to consider other ways of making money.

Andhra Pradesh state sends the most shrimp from India to the

U.S. and farmers there have spent millions of rupees (hundreds

of thousands of U.S. dollars) over the years to cultivate

high-quality shrimp in saline ponds.

Now they are being hit hard as Indian exporters have slashed

rates they offer farmers by almost 20% after the tariff shock,

wiping out most of their profits.

"I am contemplating if I should do fish farming," said the

46-year-old from Veeravasaram village who has already mortgaged

his family property and has $45,800 in outstanding loans.

"These prices will not help me get any profits and I will

not be able to pay off my loan."

The United States is the biggest market for India's

shrimp farmers and exporters, with clients including U.S.

supermarket chains such as Walmart ( WMT ) and Kroger ( KR ). Last year, total

seafood exports from India globally stood at $7.4 billion, with

shrimp accounting for 40%.

But the industry is now in troubled waters with President

Trump's 25% tariff on imports from India already in place - the

highest among major economies, and another 25% levy to kick in

from August 27 to penalize New Delhi for buying Russian oil.

By comparison, Ecuador, India's main rival for shrimp

exports to the U.S., faces a much lower 15% tariff, heightening

its competitive edge.

In Andhra, there are around 300,000 farmers engaged in

shrimp farming, selling products to dozens of exporters who ship

to America.

Pawan Kumar, head of the Seafood Exporters Association of

India, said orders from U.S. clients have been paused in recent

weeks as buyers aren't willing to absorb the tariff, and neither

can exporters, forcing the latter to cut prices they pay to

farmers.

Although India also sells shrimp to other countries such as

China, Japan and the UK, and likely will look to expand sales

there and diversify into new markets, "that's not going to

happen overnight," Kumar said.

The impact is yet another example of how Trump's tariff

threats are causing business disruptions across the world,

especially in India, given it faces one of the steepest levies

that have soured its relations with Washington.

In Andhra, six of 12 farmers Reuters interviewed said they

were considering putting shrimp farming on hold and looking at

fish farming, vegetable retailing or other local businesses to

tide over the crisis. The other six are choosing to wait it out

a bit. Each round of shrimp cultivation takes about 2 months or

more.

While prices being offered for their shrimp are being

slashed, the farmers said they still face loan payments and high

operating costs for electricity, raw material and feed, as well

as high land rentals.

"There's hardly a 20-25% profit for us on good days, and

if that's getting eaten up, what else is left?," said Gopinath

Duggineni, the chief of a local union in Ongole city, adding the

farmers plan to seek financial support from the state

government.

Ecuador, meanwhile, is closely tracking tariffs on India to

seize on business opportunities, but producers there will go

slow on new investments amid uncertainty over whether India and

the Trump administration could strike a tariff deal, said Jose

Antonio Camposano, president of National Chamber of Aquaculture

of Ecuador.

"India's exports are highly concentrated in the United

States ... just as China is for us. So that is where we could

gain ground if India withdraws," he said.