TEPA's Nordic Prize: Why Iceland Imports Indian Goods Worth $25.8M

An Ocean Gateway Opens: How Zero Tariffs Unlock Shrimp's Path to Iceland's Tables

$25.8 million in shrimp exports flowed from India to Iceland in 2025—a gain that looks modest on the surface until you understand the tariff math underneath. Crustaceans from India, previously subject to 10 percent import duties, are now exempt from any tariff measures following the implementation of TEPA (Trade and Economic Partnership Agreement) on October 1, 2025. That single duty reduction has unlocked an estimated $3 million in annual savings for Indian exporters targeting one of Europe's most selective seafood markets.

This is the TEPA tariff story that rarely makes headlines—not the headline-grabbing sweeping concessions, but the mechanical, compounding impact of surgical duty cuts on specific product flows. For India's marine sector, the Iceland corridor represents a perfect case study: a precision-guided market where tariff elimination converts directly into competitive advantage, market share, and jobs back home in coastal India.

The Tariff Architecture: From 21% to Zero

Iceland has eliminated tariffs of up to 10% on frozen, prepared and preserved shrimps and prawns, squid and cuttlefish, while TEPA's broader framework covers multiple tariff headings in the crustacean category. Indian exporters shipping land-processed shelled shrimp (the primary category) now move through Icelandic customs at 0% duty, compared to the prior 21.43% standard rate.

For a shipment of 1 million dollars in processed shrimp, that duty elimination is worth approximately $214,300 in saved tariffs annually—capital that exporters can either pocket as margin or redeploy into quality upgrades, cold-chain investment, and price competition. Companies like Avanti Frozen Foods Private Limited, which operates facilities with a total capacity of 28,000 MT and exports to markets including Europe, now move their value-added product lines to Iceland with zero friction. Avanti Feeds shares rose nearly 15% on the back of EU export approvals, reflecting investor confidence in European market expansion.

Three Products, Three Tariff Win Stories

The TEPA benefit is not uniform across all shrimp variants. The data reveals a tiered impact:

• Land-processed, shelled shrimp: $193,515 exported at zero duty vs. prior 21.43%—saved tariffs: ~$41,400 annually on this line alone.
• Vessel-processed, shelled varieties: $147,954 combined exports, now duty-free vs. previous 21.43% rate.
• Value-added prepared shrimp: Zero tariff access means cooked, breaded, and canned shrimp products now enter Iceland tariff-free, expanding margin on premium offerings.

But the real multiplier lies in volume expansion. EU imports of Indian shrimp rose by 25% in January–April 2025, with April alone seeing a 36% year-on-year jump. Iceland, as a high-income Nordic market with strict food safety standards and a growing appetite for protein diversity, stands to benefit significantly from duty-free entry. An Iceland firm has announced an investment of USD 30 million in an Indian company in the fishery sector in Maharashtra—concrete proof that tariff certainty is driving foreign capital into India's seafood ecosystem.

From Fishing Villages to Export Halls: The Human Cost of Tariffs Removed

The duty savings matter most where production happens: in the shrimp clusters of India's coastal states. India's shrimp production stood at 1.1 million tonnes, predominantly vannamei, in the financial year ending March 2024. Avanti Feeds is one of the largest shrimp feed manufacturers in the world with a market share of 48%-50% in India, and operates 5 feed manufacturing units with a combined production capacity of 6,00,000 MT, with 60,000 MT in Gujarat and the balance in Andhra Pradesh.

Nellore, Andhra Pradesh is the epicenter. In Andhra Pradesh, seafood export processing companies operate in Visakhapatnam, Nellore, and Bhimavaram. Nellore district registers prominent manufacturing of shrimp feed and processed shrimp, with 18,167 Micro, Small & Medium enterprises providing employment to 1,93,994 persons. At the industry baseline, 92% of firms are MSMEs, meaning the tariff benefit flows directly to small processing units and hatchery operators, not just multinational integrators.

The shrimp is cultivated in the coastal states including Andhra Pradesh, and the industry employs approximately 10 million people, including the shrimp farmers and people at hatcheries, processing units, and others. The gender dimension is critical: 45% of employment in the marine sector is female, concentrated in processing plants where hands prepare shrimp for freezing and export. When tariff barriers vanish, demand rises, and processing unit owners hire more shifts.

Using conservative sector employment multipliers—18 direct jobs per 100,000 dollars of exports, and 30 indirect jobs (upstream suppliers, transport, cold-chain logistics)—the $25.8 million India-Iceland flow translates to an estimated 465 direct jobs and 773 indirect jobs sustained within India's marine ecosystem. Scale that across all TEPA beneficiary products, and EFTA nations are committing to invest USD 100 billion into India over 15 years, generating downstream hiring pressure across processing, hatchery, feed-mill, and logistics networks in Nellore, Kochi, and Veraval.

The Competitive Unlock: From Margin Pressure to Market Entry

Before TEPA, a dollar of shrimp export to Iceland carried a tariff cost of 21 cents. Iceland's 360,000-person population is wealthy (per-capita income $85,000+) but price-conscious for imported proteins. That 10% tariff barrier effectively priced Indian mid-market shrimp out of local retail channels, leaving only premium-segment products competitive. Iceland has removed tariffs on a variety of Indian seafood exports, including shrimp, squid, fish feed, and fish oils, expected to increase India's share in EFTA's seafood import market and improve returns for Indian fishers and processors.

Now, with zero duty, Avanti Frozen Foods provides a fully traceable, farm-to-fork supply chain solution with a wide range of offerings such as raw, cooked and value-added shrimp products, bringing greater margin room to invest in traceability certifications, cold-chain infrastructure, and brand-building that previously would have eroded against tariff cost.

With Ecuador dominating the commodity segment, India's edge lies in value-added shrimp, with Indian shrimp preferred in the EU, though barriers had left India fighting with one hand tied, and with plant approvals now cleared, the next priority is addressing both tariff and non-tariff barriers. TEPA removes the tariff leg of that burden, allowing Indian exporters to compete on quality, food safety, and sustainability—fields where Indian certification (ASC, BAP, HACCP) now delivers genuine advantage unburdened by duty cost.

Looking Ahead: Which Products Will Unlock Next?

The TEPA schedule reveals a phased rollout. Tariff eliminations will take different forms: some will be removed immediately once TEPA comes into force on October 1, 2025; others will be phased out over three, five, seven, or 10 years, with certain reductions deferred beginning only after five years, while some tariffs will be partially reduced to fixed levels rather than eliminated altogether.

For marine products specifically, Iceland's zero-tariff window is immediate and expansive. But watch for cascading benefit from the phased schedule: Top Icelandic imports, most notably cod liver oil and fish lipid oil, will have tariffs reduced to zero over seven years in stages. As those duties wind down, fish oil and fish feed exports from India gain competitive footing. Companies like Avanti Feeds, already integrated into feed manufacturing, are positioned to capture downstream demand as Iceland's aquaculture sector expands access to lower-cost, certified Indian inputs.

The tariff-reduction machine, once set in motion, compounds. A shrimp exporter's margin gain funds a feed-mill expansion. That mill investment hires 50 workers in Andhra Pradesh. That plant supplies 20 hatchery operations, each hiring 15 seasonal workers. The duty elimination in one narrow tariff line becomes a jobs engine across the supply chain.

For India—the world's second-largest shrimp producer and 7th-largest overall in food production—Iceland represents a small but symbolically important market. It proves the TEPA framework works: surgical tariff elimination drives real trade creation, jobs, and investment. As the agreement matures and additional duty phases phase down, look for Indian exporters to build permanent buyer relationships in Reykjavik's retail sector, turning a tariff opportunity into a lasting market presence.