The United States Department of Commerce (USDoC) has raised anti-dumping duty on shrimp exports from India to 2.34% from 0.84%, a move which will lead to “some margin compression” across the supply chain. The recent three-fold hike in anti-dumping duty by the US on Indian shrimps has been done as the country says after Indian exporters made below normal value sales.
However, the sharp hike in the anti-dumping duty shrimp exports from Vietnam during March 2018 to 25.39% from 4.78% as against Indian shrimp would not hurt India much, ICRA said. “Given that India accounts for 32% of USA’s shrimp imports volume, ICRA does not expect a material impact of the ADD hike on export volume to the US and the growth trajectory is expected to continue in the near term,” Pavethra Ponniah, VP, ICRA said.
“There could, however, be some margin compression across the supply chain, as these hikes are passed down to the producers/farmers and processors,” the rating agency added. Indian shrimp exports have grown at a
compound annual growth rate (CAGR) of 21% for four years since 2013.
India has also been the largest supplier of shrimps to the US contributing 33% of its total shrimp imports. India’s shrimp production showed tremendous growth in the past few years, becoming world’s biggest exporter of shrimps, pipping Vietnam by $100 million.
CRISIL, another rating agency forecast that shrimp exports from India will nearly double to $7 billion by 2022, driven by strong demand, high quality, improved product mix, and an increase in aquaculture area in Andhra Pradesh, Gujarat, Odisha and West Bengal.
Meanwhile, the US has also dragged India to the World Trade Organisation (WTO) over export subsidies. The US alleged that India failed to remove the subsidies as required by WTO rules after the country reached certain economic benchmarks, to which, India responded that it has an 8-year window to slowly phase out the said export subsidies.