Kochi, April 1 Following the World Trade Organisation’s ruling in favour of India and Thailand, the enhanced bonding requirements for Indian shrimp exports to the US have been removed with immediate effect.
The ruling by the US Customs and Border Protection that comes into effect from April 1, 2009, is a major consolation for the Indian shrimp exporters who had to pay hefty anti-dumping duties at the US ports of entry and also execute bonds for millions of dollars upfront as well, said Mr Anwar Hashim, President of the Seafood Exporters Association of India (SEAI).
“Given the favourable ruling and the drastic reduction in anti-dumping duties, the value of Indian shrimp exports to the US could jump from the estimated Rs 611 crore for last year to over Rs 1,000 crore during the current year,” Mr Hashim added.
With the successive reduction of anti-dumping duties for Indian shrimp exports to the US, down from 10.17 per cent to 0.79 per cent according to the preliminary findings of the latest review conducted by the US Department of Commerce, Indian shrimp exports are likely to find a relatively level-playing field in the coming years. And the scenario in the US could even be better than those prevailing in Europe where an average duty of 4.2 per cent is imposed on Indian seafood exports.
Outstanding bonds
“But we have only won only half the battle,” Mr Hashim warned. There is close to $35 million pending with the US Customs Department as outstanding bonds which are still to be liquidated in favour of Indian exporters.
During the year 2005-06, Indian exporters had to execute close to $20 million as bonds for a total shrimp export of Rs 950 crore at 10.17 per cent. While the value declined to Rs 800 crore the next year the rate also fell to 7.22 per cent, which would have entailed a bond requirement of approximately $11.55 million.
Expedite liquidation
In 2007-08, Indian shrimp exports to the US were at Rs 750 crore while the duty fell to 1.69 per cent, necessitating a bond requirement of $2.55 million. While the value of shrimp exports to the US is estimated at Rs 611 crore for 2008-09, the bonding requirement would have been around $1 million at a rate of 0.79 per cent. The SEAI with assistance of MPEDA and the Government of India would try and expedite the liquidation of the bonds at the earliest, Mr Hashim said.
The ruling put up by the US Customs and Border Department reads: “This notice ends the designation of shrimp subject to anti-dumping or countervailing duty orders as a special category or covered case subject to an enhanced bonding requirement.”
Revival likely
The WTO had come out with a ruling which asked the US Government to revoke the enhanced bonding requirement by the end of March 2009, sources in SEAI pointed out.
The timing of the present ruling could not have been better, seafood exporters said. If shrimp farming and catches grow on expected lines, Indian shrimp could witness a revival this year.
Source : Business Line