With Another Setback, Is This The Worst Year for Seafood Industry?

The seafood industry, which is already reeling under problems of export and production, has now more bad news to take in. The US trade authorities intend to put retaliatory tariffs against India's imposition of 2% tax on revenue generation by digital services offered in the country.  

Why should the Indian shrimp industry worry?  

One of the items mentioned in the tariff list is frozen shrimps. The biggest aquaculture shrimp market of India is the US. It accounts for nearly 50% of India's total production amounting to $2.5 billion annually.  

As per a statement by Sea Food Exporters' Association, the shrimp export sector employs around 10 million people. Shrimp farming is also on the rise in India. With the US's decision, these employed people will get affected seriously. Hence, there is an urgent need for the government to intervene.  

Increased shipping charges 

As per a note by the seafood industry, a notification has come from Maersk lines, which is the biggest shipping liner of the world, that the freight rates have been further increased to $12,500 with effect from May 1, 2021. This is not the first time that freight rates have increased. They have been continuously on the upward curve for reefer containers to the US since 2020.  

In march 2020, the rate increased to $3500. Until now it was $6500. Now, from May, it will be $12,500.  

With the world's biggest shipping liner increasing the freight rate, it is likely that the other lines follow suit.  

According to the President of Seafood Exporters Association of India-Kerala region, Alex K Ninan, marine product exports sector that regularly registers an annual growth for more than 10 years is witnessing its worst phase in 2020-21 with a 20% dip in volumes and turnover.  

How the dreams of marine product export sector crashed this year 

The marine product export sector had a healthy beginning last year. It had charted out an ambitious plan of Rs. 1,00,000 crore shipments by the year 2025.  

As of now, this dream seems to have shattered. Chances of reaching this target looks bleak. The marine sector is in the midst of troubles from various fronts like fiscal support, issues of primary production source in both culture and capture fisheries, blockage and disruptions of various big markets, increase in freight rates, lack of financial support from banking sector, and many more.  

To add fuel to the fire is the disruption in the shrimp business with China, which comprises 25% of the total marine product exports from India. This is due to border tensions, which has affected normal business.  

The Seafood Exporters Association has urged the central government to include issues on stringent measures on antibiotic residues in shrimp consignment in his trade talks at the India-EU Summit shortly.