From April to September last year, the export of marine products dropped by almost 7% compared to the corresponding period of 2011. This in turn amounted to a fall in earnings of 16.6%.
“The industry is passing through a tough phase right now. Just a few months back, we had been celebrating the conclusion of our most successful fiscal, surpassing all previous export records and the US$ 3.5bn mark. Though the current setback could be attributed to some unforeseen developments in the international scene, the impact has been devastating,” the Seafood Exporters Association of India (SEAI) outlined in an industry update.
Steps to be taken
To redress the situation, the body has called on the government to implement a series of steps.
First, it has demanded an increase in reefer base rates as a result of shipping lines operating from Indian coasts unilaterally announcing an increase of US$1,500 in freight rates irrespective of the size of container and port of destination.
“[This move] clearly indicates that the increase has been applied without proper methodology, justification or without supportive documentation. It is truly amazing that freight carriers and their agents are allowed to be totally beyond any control measures of the Indian Government and can continue to operate with impunity and fix the scale of rates according to their whims and fancies,” it explained
Another demand is to force a real reduction in the terminal handling charges levied by Indian terminal operators, in spite of the government fixing rates which, SEAI claims, are ignored by shipping service providers with impunity.
The seafood body has also called on the government to lobby for the removal of the US anti-dumping duty imposed on frozen shrimp imports from India, which has recently increased by 82 basis points to 2.51%. This, it says, has served to reduce the number of Indian exporters to the US from 270 in 2005 to 68 today.
Adverse legalese
And SEAI has demanded the government addresses the Status Holder Incentive Scheme for the marine industry. The scheme was intended to give preference to a number of export product groups, including seafood; however, the wording of the programme precluded marine products, and in December the policy withdrew such exports altogether.
“Seafood exports have always figured on the ‘growth sectors’ side of the country’s economy, but periodic policy formulations haven’t done enough to improve upon the growth of this industry,” said the SEAI report.
“As exporters, we have always felt that policy changes are effected without taking into account important factors like the comparative situation in our competitors’ economies.”