Anti-dumping duty on shrimp exports to the US reduced by 40% with the US department of commerce (USDOC) reducing the effective duty for India to 1.6% from the earlier 2.67%. This relief comes after the seafood sector suffered successive setbacks last year when the US agency increased the anti-dumping duty by a whopping 300% and decided on extending the anti-dumping duty for another five years.
Shrimp exports to the US, which are currently looking up after staying depressed for five years, are expected to increase substantially.
Export of frozen shrimp to the US has registered a tremendous growth of 88.12% in volume and 149.05% in dollar terms during the first nine months of the current financial year, mostly due to the BP oil spill in the Gulf of Mexico and recurring hurricanes.
India and several countries including Vietnam, Thailand and Brazil came under the scanner of the USDOC in 2004 after organisations in US alleged that lower-priced, pond-raised shrimps were hurting the US industry.
US-based Southern Shrimp Alliance (SSA) is the original petitioner against India and several other nations in the shrimp import issue. The US mostly harvests shrimp from the sea. In response to their efforts, the US International Trade Commission imposed anti-dumping duties on shrimp imports from Asia and Latin America in 2004.
In addition to the anti-dumping duty, the US has imposed a customs bond, which is a cash guarantee collected by US customs against any further rise in the anti-dumping duty.
The US agency had to completely withdraw the bond in 2009 pursuant to the World Trade Organisation (WTO) Appellate Body report that the application of this requirement to shrimp from Thailand and India was inconsistent with US WTO obligations.
India failed to convince the US government in 2010 when the sunset review of the shrimp imports from India decided to continue with the duty saying that Indian exporters did not submit adequate data. Under the US Tariff Act of 1930, all tariffs come automatically under review every five years. China and Vietnam, which are also facing the punitive tariff, did not participate in the proceedings.
The effect of the anti-dumping duty was dramatic on Indian exports. Indian shrimp exporting companies to US fell to less than 75 from 228 at the time of imposition of the punitive duties.
Frozen shrimp exports constitute almost 50% of the value of India?s total seafood exports and the US action had a deleterious effect on the numerous aquaculture farms spread over coastal India.