Kochi, March 31 India’s marine product exports are likely to face pressure from Vietnam after the latter signed free-trade agreement with Japan, the largest importer of Indian shrimp products, the Seafood Exporters Association of India (SEAI) has said.
Contribution
Japan accounted for 16 per cent of India’s total overseas sale of marine products last year.
With this move, Japan’s top shrimp suppliers, Indonesia, Vietnam and Thailand, have all bagged duty free status for their seafood exports to the Far-Eastern country.
The latest pact removes the 10-15 per cent duty which was in vogue on Vietnamese shrimp, lobsters and other seafood imports into Japan.
Top suppliers
Japan’s top shrimp suppliers, Indonesia, Vietnam and Thailand accounted for 17,920 tonnes, 15,632 tonnes and 10,412 tonnes, respectively, during 2008.
India is the fourth largest exporter of shrimp products to Japan.
Indian exports to the Japanese markets had already been revealing a declining trend.
Though shrimp was quite predominant, Indian seafood exports to Japan included crab meat, lobster, squid and octopus.
In value terms, seafood exports to Japan dipped from Rs 1,353 crore to Rs 1,237 crore in 2007-08.
With the top three shrimp exporters to the Japanese market gaining duty free status, domestic traders warn that Indian seafood export could dip further in the coming years.
Under stress
The trade pact comes at a time when Indian shrimp exports have already been under pressure from fierce competition from other low-cost producing countries and falling demand due to recession gripping major developed countries, sources in SEAI warned.
Compounding the exporters worry has been the anti-dumping duty which is still prevalent on Indian shrimp exports to the US markets and persistent quality and residue worries with regard to the EU market.
Duty-free access
According to the agreement, Vietnam will get duty-free access to the Japanese markets for as many as 7,264 items including shrimp products, a report by the Information and Trade Promotion Centre of Ho Chi Minh city, which is an official Vietnam government agency specialising in facilitating trade and investment said.
COST-COMPETITIVE
The duty free access to Vietnam is likely to impair Indian seafood exports in cost-competitive market like Japan. While duty on Vietnamese exports has been waived, Indian seafood exports continue to attract 2.5 to 15 per cent duty into the Japanese market.
TIME LAG
Since a time lag is expected to between the signing of the trade pact and its actual implementation, Indian seafood exports are unlikely to be dented this year.
But the true impact could become visible in exports next year, seafood exporters warn.
Source : Business Line