The 5.91 per cent countervailing duty imposed by the US Government on shrimps from India is unlikely to hit the volume of exports to the US, which is India’s largest shrimp market.

The duty, announced by the US Department of Commerce on May 29, is sure to raise exporters’ costs. Together with the existing 3.5 per cent anti-dumping duty, exporters now have to pay nearly 9 per cent of the value of their shipments to the US Custom and Border Patrol upfront at the port of entry. This is an additional cost that most likely will be passed on to shrimp producers.

Ravi Reddy, President of Seafood Exporters Association of India, said that the duty was an ‘unfortunate’ extra burden on the exporters. There would also be a lot of administrative expenses, associated with the duty, too. “It is not going to be smooth for us,” he told Business Line.

He said there was nothing the exporters or the Centre could do about the duty that was imposed on a complaint by the Coalition of Gulf Shrimp Industry that Indian exporters received government aid and incentives. This, according to COGSI, constituted an ‘unfair trade practice’ that handicapped shrimp producers in the US coastal States from competing with the foreign exporters. The US Commerce Department had found the claim valid on shrimp imports from India, China, Malaysia, Vietnam and Thailand.

Ravi Reddy, however, said the duty was unlikely to discourage exports to the US which was a ‘good market.’ He said that though the US has already started charging the 5.91 per cent duty, a final decision was yet to come. And, when the final decision comes in July-August, there is a remote possibility that the current 3.5 per cent anti-dumping duty could be adjusted against the duty, he said.

Inspectors from the US International Trade Commission are already at work at Devi Fisheries and Devi Seafood in Visakhapatnam that were chosen as two respondents from India. Their report will influence the final decision on the duty rates.

Sources in Kochi, a major seafood exporting centre, said that the confidence that the duty would not hit exports was based on the situation in the shrimp sector in Thailand, the largest exporter (1.70 lakh tonnes in 2011) to the US. The Early Mortality Syndrome had devastated Thai aquaculture, leading to a sharp fall in exports to the US.

India, the fourth largest shrimp supplier (48,000 tonnes in 2011) to the US, could take advantage of this situation. Also, there were four other countries that were also slapped with the duty at various rates. Only Indonesia and Ecuador were in a position to cash in on the duty slapped on these five countries.

basheer.kpm@thehindu.co.in

(This article was published in the Business Line print edition dated June 18, 2013)
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