EU-Vietnam trade deal has seafood exporters alarmed

V Sajeev Kumar Kochi | Updated on June 18, 2020

India exported $900 million worth seafood to EU in 2018-19 and holds the third position after the US and Japan   -  KK Mustafah

Domestic industry fears it will lose edge in key export market

Seafood exporters are anxious about the EU-Vietnam FTA (free trade agreement) that is expected to give Vietnam an export advantage on marine food products vis-à-vis India in accessing EU markets.

EU has totally eliminated the import tariff on frozen shrimp and other shrimps, marked at 4.2 per cent under the GSP (Generalized System of Preferences). Other frozen products such as skipjack tuna, surumi, and cuttlefish, octopus (prepared or preserved) will be totally eliminated from tariffs, official sources said, adding that the import tariff for India for these items ranges from 4.2 per cent to 18.5 per cent.

Staging category

In addition, Vietnam will be benefited from tariff relaxation under the staging category for some products where India has export potential. This includes crab (prepared or preserved), frozen fish, prepared or preserved sardines, cuttlefish and squids. Here, the import tariff for India ranges between 2.5 per cent and 2.8 per cent.

Since the agreement would give improved market access to Vietnam in the EU, sources in the sector told BusinessLine that an early execution of India-EU FTA is essential to help the domestic industry.

India exported $900 million worth seafood to EU in 2018-19 and holds the third position after the US and Japan. The total shrimp export during the period is to the tune of $4.7 billion.

Alex K Ninan, President, Seafood Exporters Association of India - Kerala region, said the high duty structure would make Indian seafood products uncompetitive in the EU markets and this would reflect in export earnings.

Shortage of Vannamei shrimp

Meanwhile, seafood exports have started picking up slowly, but the raw material shortage is posing a problem. According to Ninan, the shortage of Vannamei shrimp, the most preferred variety in the US, has forced exporters to depend on small-size shrimps from the traditional fishing sector. The trawling ban has also led to a shortage of export varieties such as squid, cuttlefish and octopus.

D Ramaraj, President, All India Shrimp Hatcheries Association, said that there was some initial disruption in Vannamei supply during the lockdown, but it has resumed fully by now. The rising demand has forced farmers to stock in a big way, which would be harvested in July-August. The current harvest available is the stock added in January-February.

Shaji Baby John of Kings Group said the overseas demand is mainly for retail packs for home consumption rather than institutional packs due to the closing down of eateries and restaurants in many countries amid the Covid threat. However, he expressed the hope that fishing holidays and an expected good monsoon this year would provide a better catch after the trawling ban on the West Coast.

Published on June 18, 2020

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