Exporters of marine products should invest in value addition and infrastructure along with product and market diversification to revive growth, US-based trade finance company Drip Capital said on Thursday.
India exported nearly 6.3 billion dollars (about Rs 45,000 crore) worth of marine products in FY19. The sector reported a compound annual growth rate of 13 per cent between FY10 to FY19.
However, it declined by 9 per cent from FY18 to FY19 in shipment value terms even though shipments grew 18 per cent in volume terms over this period.
Shrimp, frozen fish and mollusks are major export commodities with shrimp contributing 71 per cent of India's total marine export shipments.
"Indian shrimp exports to the United States face stringent quality checks and scanning along with a hike in anti-dumping duty to 2.34 per cent from 0.84 per cent in 2018, which has had a negative effect on the shipment volumes," said Pushkar Mukewar, Co-Founder and Co-CEO of Drip Capital.
"Other factors impacting Indian marine exports include a change in consumer preferences and an increase in quality consciousness in traditional markets for marine exports like the European Union. This has led to the implementation of tougher norms in these regions, which has further increased the pressure on Indian exporters," he said while quoting Drip Capital's latest commodity report.
Quality concerns from buyer markets, particularly in the West, are going to remain a big challenge for Indian farmers who face increasing competition from other markets offering high-quality and value-added products, the report says.
Besides, while Indian marine exports have long relied only on Vannamei shrimp, over-reliance on exporting one specific product is unlikely to be a sustainable long-term strategy.
On the other side, amid the US-China trade war, China is also opening as a potential market for Indian marine exporters. This can also translate into further growth possibilities for Indian marine exports in east Asia, the report says.
The United States is the largest market for Indian shrimp while China and Vietnam are the largest importers of Indian frozen fish and mollusks. Together, these three countries make up 50 to 60 per cent of the country's marine export market.
However, with the tightening of regulations by the US Food and Drug Administration (FDA) and the National Oceanic and Atmospheric Administration (NOAA), Indian shrimp exporters are now sailing amid choppy waters.
Andhra Pradesh is the top marine exporting state with a compound annual growth rate of 15 per cent followed by Gujarat and West Bengal with a compound annual growth rate of 10 per cent, roughly at par with the country's overall growth. Other contributing states are Kerala and Maharashtra.
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