The $1.85 billion seafood export industry of the nation has welcomed the relief provided by the government to offset the strengthening of the Indian rupee.
The Seafood Exporters Association of India (SEAI) said that the relief would go a long way in making up the losses suffered by the exporters.
?The steps taken by the government would bring a positive impact of Rs 250 crore to the sector which has been at the receiving end for quite some time,? AJ Tharakan, national president,of SEAI told FE. The lowering of interest rate for export credit and the duty drawback would cut down the operating costs to a certain extent. The association estimates the new duty drawback benefits at 3% from the existing 1%.
Tharakan said that the impact of the rupee appreciation has been worse than the Tsunami and on the existing stock itself, the exporters have lost Rs 500 crore.
Exports from the nation have dropped drastically as the seafood export is highly price sensitive.
SEAI estimates suggest that at least 50 export units in India have shut down over the past few months. That is because the built-up inventories were bought at Rs 45 per dollar, which is leading to big losses. The currency of competing nations like Vietnam, Thailand, and Indonesia has not appreciated to the level of the Indian currency.
The US is the single largest market for Indian seafood exports and exporters are wary of entering into contracts fearing losses due to currency rate fluctuations.