The U.S. administration has imposed a non-tariff barrier by including shrimps in the Seafood Import Monitoring Program (SIMP), which may hurt exports from India as the United States is the largest market for $5 billion Indian seafood industry.
SIMP requires traceability information on imported seafood from point of capture to point of first sale in the US in order to thwart Illegal, Unreported and Unregulated (IUU) fishing activity. SIMP will come into effect from January 1, 2019.
India has been exporting shrimp to US via Vietnam, which was facing steep hike in anti-dumping from India. Even EU had said that India should monitor primary production of shrimp before exporting to EU.
Inclusion of shrimp in the SIMP will be a double blow to the Indian exporters as US had recently raised the anti-dumping duty (preliminary) by 25.39 per cent for Vietnam from 4.8 per cent last year. India largely exports block frozen shrimp to Vietnam for reprocessing and forward shipments to its customer countries like China, EU, Japan and USA.
Indian exporters are already battling with the lower international shrimp prices due to the supply glut. SIMP will discourage new exporters to sell in the US.
Shrimps have driven India’s seafood exports in recent years and revenues have grown by 21 per cent and 31 per cent in fiscals 2017 and 2018.
According to ratings agency CRISIL, the United States — the world’s leading seafood importer — accounted for 31 per cent of India’s exports last fiscal, and for 28 per cent of Vietnam’s.
Over the past five years, Indian seafood exports to the US have grown by 26 per cent CAGR. The US is also the largest importer of Indian shrimps. Last year, 27 per cent of US shrimp imports were from India.
It is also a significant export market for Vietnam, which is the second-largest export destination for India – as 28 per cent of India’s exports are directed to Vietnam and 17 per cent of Vietnam’s exports are directed to the US.
Hence, any change in trade policies by the US, concerning India or Vietnam, could impact Indian exports, the report of the rating agency said.