US slashes shrimp import duty

Indian marine exporters see move as first step to tax withdrawal.

Indian marine exports to the US will get a boost as the US Department of Commerce (DoC) has reduced the anti-dumping duty on shrimps by 3.32 per cent. The weighted average duty now stands at 7.22 per cent.

Shrimp exporters will now get a substantial duty refund as the revised structure is applicable for the period between August 2004 and January 2006.

The US department had in March fixed the anti-dumping duty at 10.54 per cent after completing the first administrative review, posing a serious threat to Indian shrimp exports to the US.

The department is now reviewing the anti-dumping duty for the period after January 2006. Shrimp exporters believe that the ongoing second administrative review of the department would lead to the withdrawal of the duty.

Among the major exporters, Falcon Marine will pay an anti-dumping duty of 4.39 per cent (the earlier recommendation was 11.09 per cent), Hindustan Lever will pay 18.83 per cent (24.52 per cent) and the Liberty Group will pay 4.03 per cent.

Forty-six other companies will have to pay an average 7.22 per cent duty. According to marine exporters, the companies will get refund of the duty according to the revised rates.

Around 20 other Indian companies had settled the issue out of court with the Southern Shrimp Alliance (SSA), a US shrimp farmers' association, to avoid the cumbersome process of the US government's review and paid 10.17 per cent duty.

The companies that which did not respond to the US government's duty review mechanism will, however, attract a duty of 82.30 per cent.

The US had imposed anti-dumping duty on imports from a host of Asian countries such as India, China, Vietnam and Thailand in response to a complaint lodged by the SSA.

But the US government has softened its stand since then. In fact, the anti-dumping duty on Ecuador was withdrawn on the recommendation of the World Trade Organisation (WTO).

The Ecuador example has raised the hopes of Indian shrimp exporters, who feel the reduction of the anti-dumping duty is just the first step towards an eventual withdrawal of the duty.

Along with other nations, India has also lodged a complaint with the WTO against the imposition of the anti-dumping duty and non-adherence to zeroing principles in calculation of the duty.

The final hearing of the case has been completed and a decision is expected in October.