Oct 9: Starmer Lands in India to Talk FTA, Shrimp Industry Hits Tariff Wall

California is now officially lit! Governor Gavin Newsom signed a bill declaring Diwali a state holiday—a major victory for the Indian-American community—making California the third state after Pennsylvania and Connecticut to officially recognize Diwali as a state holiday. Now that the state’s gone full festive and the holiday calendar is brighter, we’re fully awaiting the next press release to include a sing-along section of that iconic Diwali song 🪔🎶

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

The Indian stock market settled in the red on Wednesday after a volatile session, paring initial gains amid mixed global cues and cautious investor sentiment, ending the four-day winning streak.

The Visit In Context: UK Prime Minister Keir Starmer arrived in Mumbai for a two-day visit aimed at strengthening trade, investment, and strategic ties with India. He is accompanied by a 125-member delegation of CEOs, entrepreneurs, university Vice Chancellors, and cultural institutions—the largest UK government trade mission to India to date. The visit follows the signing of the India-UK Free Trade Agreement (FTA) in July, Britain’s largest post-Brexit trade deal. Meetings with Prime Minister Narendra Modi, a CEO Forum, and the 6th Global Fintech Fest are on the agenda.

The UK’s Objectives And Expected Gains: Starmer’s main objective is to implement the FTA as quickly as possible, giving British businesses access to one of the world’s fastest-growing markets. Major companies in the delegation include Rolls-Royce, BT, Diageo, London Stock Exchange, and British Airways. Key sectors targeted are engineering, telecom, alcohol, aviation, education, creative industries, and fintech. The FTA is projected to deliver £4.8 billion to UK GDP annually, add £2.2 billion to wages, and boost bilateral trade by £25.5 billion. Starmer emphasizes that the deal is about business-to-business engagement, and that the topic of new UK visas for skilled Indians is not on the table.

What India Stands To Gain: India secures several key advantages from the FTA: reduced tariffs on UK imports for textiles, leather, engineering goods, sports goods, toys, and pharmaceuticals. Customs will be easier with more digital processes and dedicated points of contact for small and medium businesses. A joint research fund will support AI, quantum technology, clean energy, and green hydrogen. The deal also covers co-development of jet engines and naval systems, with transfer of technical know-how. Education benefits include mutual recognition of UK degrees, new branch campuses in India (e.g., University of Southampton in Gurugram), and expanded student mobility. Faster logistics and trade facilitation will support exports and tourism, reinforcing India as a reliable partner and a key global economic player by 2028.

The Tariff Trigger: The U.S.—India’s largest market for shrimp exports, accounting for over 40%—has imposed tariffs that are jolting the industry. In 2023-24, Indian shrimp exports to the U.S. were worth $2.5 billion, supporting over one million jobs across farms, processing plants, and exporters. Andhra Pradesh, which produces 75–85% of India’s shrimp, has been hit the hardest, with farmers facing price drops of nearly 40%. In August, President Trump announced a 25% reciprocal tariff on Indian goods, citing trade imbalances, followed by another 25% penalty tied to India’s purchases of Russian energy. Including existing duties, Indian shrimp now faces effective tariffs of nearly 60%, making exports to the U.S. largely unviable.

Economic And Employment Impact: The tariffs are forcing several processing units in Andhra Pradesh to scale back operations. Over 50 lakh jobs, direct and indirect, are at risk, with women—who form the backbone of shrimp processing—facing the threat of losing employment. Exporters are exploring alternatives in the EU, Russia, Japan, and the UAE, but diversification is neither simple nor fast, taking up to a year to establish new supply chains. India exports roughly 4 lakh tonnes of shrimp to the U.S., while other markets absorb only about 1 lakh tonnes collectively, making market redirection a major challenge.

Impact On Shrimp Prices In The U.S: U.S. wholesale prices are up 15–20%, squeezing restaurants, supermarkets, and street vendors. Popular chains like Red Lobster have already scaled back promotions, while price-sensitive street sales have nearly vanished.

Looking Ahead: Short-term pain is severe, but exporters hope that market diversification and government support will stabilize the industry. The resilience of India’s shrimp sector will depend on strategic planning, new markets, and policy clarity to safeguard both jobs and trade revenue. 

Tata Group Pumps Crores Into Tata Digital: Despite ₹16,958.3 crore in losses, Tata Group invested an additional ₹4,000 crore in Tata Digital in FY25, signaling continued backing in its digital portfolio—Croma, BigBasket, Tata 1MG, and Tata Cliq—with the goal of driving them toward profitability.

iPhone Exports Cross $10B Mark: India’s iPhone exports hit a record $10 billion in H1FY26, up 75% YoY, with September alone seeing $1.25 billion. Growth is driven by two new Apple manufacturing facilities and supply chain diversification beyond China.

India Eyes More Discounted Russian Oil:  Indian refiners are poised to increase their oil imports from Russia, capitalizing on deep discounts amid ongoing trade negotiations with the U.S. November Urals crude is now priced $2–$2.50 per barrel below Brent, a significant drop from earlier this year.

Skoda Goes Electric: Skoda Auto India plans to launch an electric vehicle (EV) in the country by 2027–28. The company aims to establish a localized supplier base and anticipates the necessary charging infrastructure to be in place by launch time.

Arattai Passes ChatGPT, Gemini in App Charts: Arattai, messaging app developed by Zoho, has surged to the top of India's app charts, surpassing global giants like ChatGPT and Google Gemini in both the Apple App Store and Google Play Store.

Google’s AI Data Centre Cluster: Google is set to invest $10 billion in a 1-gigawatt (GW) data centre cluster in Visakhapatnam, marking its first such investment in India. This initiative is part of India's plan to develop its first international AI infrastructure hub.

Revolut To Launch Digital Payments App: Revolut, London-based fintech firm, is set to launch its digital payments app in India, aiming to sign up 20 million users by 2030. The app will integrate with India's Unified Payments Interface (UPI) and offer Visa-branded prepaid cards, facilitating both domestic and international transactions.