India’s seafood sector has expressed concern at a proposal by Louisiana senator Bill Cassidy to constitute the India Shrimp Tariff Act to levy duty on shrimp imports from India.
The proposal made in the last week of September has found support from the Southern Shrimp Alliance (SSA), an organisation of shrimp fishermen, shrimp processors and other members of the industry in that country’s eight warm water shrimp producing states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Texas.
Frozen shrimp comprises nearly 70 percent of seafood export from India, which reached a record $8.09 billion in FY23. The US is currently the largest market for Indian seafood, mainly shrimp.
The SSA website says that in the proposed India Shrimp Tariff Act, Cassidy has pointed out that imports of Indian aquaculture shrimp that he alleges is highly subsidised account for 40 percent of the volume of all shrimp imports into the country.
According to him, India’s dominance of the US shrimp market has reduced the share of the local shrimp industry to less than 10 percent of the shrimp consumed in the country. He noted that while India imposes a customs duty of 30 percent on shrimp imports with an additional 10 percent social welfare surcharge, the US imposes no basic duties on imports of shrimp into the country.
“To address these inequities, the India Shrimp Tariff Act would impose a general rate of duty on Indian shrimp of 10 percent beginning in 2024. One year later, in 2025, the duty rate would be increased to 20 percent. From 2026 forward, the duty rate on Indian shrimp would be 40 percent equivalent to India’s rate of duty on shrimp imports into that country,” Cassidy said.
SSA executive director John Williams has welcomed the proposal and sought the support of other senators for the legislation. “Shrimpers cannot work because Indian shrimp unfair trade practices have gone unaddressed for over 10 years. Now, more than ever, fishermen and their families need the support of Congressional representatives,” read his statement on the SSA website.
All India Shrimp Hatcheries Association (AISHA) president Ravi Kumar Yellanki has urged the government to respond. “The commerce ministry should take it seriously and should make a pre-emptive step to counter it. Once the Senate passes the bill, it will be difficult for India to fight it,” he said, adding that this is not the first time Cassidy has come up with proposals to restrict Indian shrimp imports.
The issue has been raised in a foreign country and it is not certain that the bill will be passed, said Seafood Exporters Association of India president Jagdish V Fofandi, adding, “The Indian government has to counter it. For the time being, we are adopting a wait and watch policy.”
The seafood industry also argued against the notion of heavy subsidies in aquaculture. D Ramraj, past president of AISHA, said the subsidies available are on a par with other aquaculture shrimp producing countries. “Moreover, aquaculture farmers, who are the primary producers, do not enjoy subsidies on seed and feed which are the basic requirements for a farm. If the bill is passed, it will affect the livelihood of thousands of shrimp farmers,” he said.
Cassidy also claimed that while the European Union requires that half of all Indian aquaculture shipments be tested for veterinary drugs, but the US Food and Drug Administration has declined to apply additional scrutiny to Indian farmed shrimp imports and inspects less than 0.1 percent of shrimp shipments for the presence of banned antimicrobials.
The India Shrimp Tariff Act would also have provisions to eliminate the exemption of cooked shrimp from the requirements of the US Department of Agriculture’s country-of-origin labelling (COOL) requirements. “Section 5 of the bill eliminates the exclusion of cooked crawfish and cooked shrimp products from COOL disclosure requirements and would provide consumers with the ability to choose US wild-caught cooked shrimp at grocery stores throughout the country,” Cassidy said. If it comes through, this could have an adverse impact on the consumption of value-added Indian shrimps in the US.
He has also raised questions about the environmental and social sustainability of Indian shrimp aquaculture. “This shrimp is produced under weak environmental and worker protection, meaning that Indian shrimp aquaculture is characterised by decimated mangrove forests, rampant use of banned antibiotics and fungicides, and child labour. Indian shrimp is processed under contract labour arrangements that encourage and facilitate forced labour,” the senator said.
He noted that global environmental concerns regarding the impact of deforestation have not extended to mangroves and these ecosystems have been sacrificed to further expand shrimp aquaculture in India. “While US shrimp importers and purchasers have condemned the use of peeling sheds in Thailand, this same production model has proliferated throughout the Indian shrimp industry,” Cassidy added.
The proposal has come even as seafood exports from India faced a downturn in FY23 with poor demand and low prices for shrimp in major importing markets such as the US, China and Europe.
“I have already closed three of five processing factories. My annual turnover dropped to around Rs 1,300 crore from Rs 1,800-2,000 crore last year. It may fall further this year,” said Tara Ranjan Patnaik, managing director of Falcon Marine Exports, a Bhubaneswar, Odisha-based aquaculture company.
There was a double-digit percentage drop in marine products exports from April to July, said Yellanki. “August is no different though the figures are yet to come. This trend is likely to continue for a few more months. One way to deal with it is to promote the domestic market,” he said.