In the last decade, Indian shrimp aquaculture production tripled from 30,000 tons (1990) to 102,000 tons (1999). This fast development, combined with a lack of adequate planning and regulation, caused a number of environmental problems and social conflicts, including conversion of mangroves, water pollution, and salinization of drinking water wells. Because of the significant investments made in shrimp culture and the size of the environmental and social impacts, the formulation of a regulatory framework for shrimp aquaculture has been subject to an intensive debate between the aquaculture and the environmental lobbies. Following an order from the Supreme Court (1996), the Aquaculture Authority was established and a regulatory and institutional framework for the shrimp aquaculture sector has been set up. However, implementation of the system is still defective, and there is an urgent need for improvement. Farmers are increasingly able to prevent the devastating white spot disease in shrimps, and in the absence of proper planning and regulation, further expansion of shrimp production could result in significant additional environmental and social costs. The environmental and social management of Indian shrimp farming can be improved through a mix of policy measures, including strengthening of the license system, more effective enforcement of regulations, the use of economic incentives, and increased monitoring of environmental and social impacts.