KOCHI: The decision of the US administration to impose a 34.26% tariff on Indian marine food products has left the seafood exporters and shrimp farmers in the country in deep distress.
Though there is no indication of tariff negotiations, the seafood exporters are hopeful that the US may reduce the tariffs. If the US administration refuses to reduce the reciprocal tax, small producers like Ecuador may take over the US market riding on the tax advantage and India will be the loser as we have a 40% share in the US seafood market.
As per information, the US has decided to impose an anti-dumping duty of 2.49%, countervailing duty of 5.77% and reciprocal tariff of 26% which will raise the tariff to a total of 34.26%. The situation will be advantageous to Ecuador as its tariff is only 13.78%.
“Despite the ban on Indian wild-caught shrimp, the US continues to be the biggest market for Indian seafood products. We have around 35 to 40% share in the US market. The reciprocal tariff of 26% will make our products expensive and there are chances of Ecuador taking over the market.
The buyers have already asked us to stop shipping new consignments. Many consignments are already on the way and we fear the buyers may demand a discount or reject them. There is uncertainty over shipping the inventory in the cold storage. The exporters are forced to stop procurement as we will be forced to reduce the rates,” said Seafood Exporters Association of India vice-president, Alex Ninan.
India exports vanamai shrimp, black tiger shrimp, squid and cuttle fish to the US market and the country’s seafood export stood at Rs 60,524 crore in 2023-24. The earnings from frozen shrimp export alone stood at Rs 40,013 crore during the period. The export firms in Kerala ship around Rs 8,000 crore worth seafood products per year and a major share of the products go to the US market.
“We will have to concentrate more on the European and China market as the high reciprocal tax will make our products expensive in the US market. But we cannot afford to lose a market like the US as there is no other country that consumes so much of shrimp. We are hopeful that the US may reduce the reciprocal tariff after talks.
Besides, the reduction of duty on feed by the India government will reduce the farmers’ production cost by around Rs 30. The buyers, exporters and farmers will have to share the burden,” said Seafood Exporters Association Kerala Chapter president M R Premachandra Bhat.
“The reciprocal tariff and anti-dumping duty will affect around 130 export-oriented seafood processing units in Kerala and the thousands of workers in the sector. The Kerala government should send a delegation to Centre to raise Kerala’s concern before the Union government,” said Kerala Fishermen Coordination Committee president Charles George.