India - New fish to fry

For many years, India’s fishery exports (the largest component in the broad category of agro-exports) have had an unhealthy dependence on shrimp. So it is good news that this dependence is now reducing, the export basket diversifies. Also reducing is the dependence on the two principal markets (Japan and the United States), as other markets are being tapped. While these are positive developments, it cannot unfortunately be claimed that the woes of the marine fisheries sector are over. There has for years been a near stagnation in output, and deceleration in the growth of seafood exports. Even the growing domestic demand for fish and fish products is being met increasingly from inland fisheries.

The export trends of the past five years reveal that the share of shrimps in total seafood shipments has declined from 65 per cent to 52 per cent in value terms, and from 32 per cent to 25 per cent in quantitative terms. Shrimps have yielded ground to other marine products like frozen finfish and cuttlefish, whose share in exports has expanded. However, squids have not done too well despite their good potential. The narrow seafood export kitty — still largely black tiger-prawns, and only a small buyers’ club — has proved baneful for this sector though exporters have taken a long while to realise this, and have paid the price for their failure to do something about the problem. The US in particular has been taking full advantage of this situation by putting forward various kinds of riders, raising objections on sanitary and phyto-sanitary issues, toxicity levels and antibiotic residues, and even levying anti-dumping duties and other fiscal penalties. It is of course an unfortunate truth that Indian export houses were quite lax on sanitary and phyto-sanitary norms some years ago, but many of them have put their houses in order and some have secured endorsements from the US inspecting teams. Still, the disputes settlement body of the World Trade Organisation (WTO) is still to be approached frequently enough against unfair US trade practices. The emergence of the European Union and several other South-East Asian and West Asian markets as export destinations may, therefore, ease pressure to an extent by offering fresh avenues for fisheries exports.
Nevertheless, the way forward is not easy because, along with the expansion of export markets, the competition has also grown. Countries like China, Vietnam, Thailand and Indonesia have emerged as tough rivals, and seem to be offering cheaper products. Besides, the US, Japan and even some European nations have begun importing vannamei shrimps, which are priced lower because of their smaller production cost, as a substitute for the black tiger-prawn. India has begun vannamei culture only this year. Thus, the cost advantage that India enjoyed in the past has largely been eroded. Moreover, domestic seafood production costs have gone up on account of higher freight, power, labour and infrastructure expenses, as well as frequent outbreaks of epidemics in shrimp farms. It is clear that India’s seafood exporters have to go in for better farming methods and enhanced operational efficiencies, besides cutting costs, in order to remain competitive. Only then can this sector draw upon the new diversity in its export basket for a sustainable seafood export boom