MUMBAI:
US-based trade finance company Drip Capital has released a report detailing India’s marine exports sector. Chalking out detailed insights from proprietary data and on-ground conversations with exporters, the report analyses India’s marine exports, wherein shrimp, frozen fish, and mollusks are major export commodities, with shrimp contributing 71% of India’s total marine export shipments.
According to the Directorate-General of Foreign Trade (DGFT), India exported nearly $6.3 billion (around Rs. 45,000 crores) worth of marine products in FY2019. The sector reported a CAGR of 13% between FY2010 to FY2019. However, it declined by 9% from FY2018 to FY2019 (in shipment value terms), even though shipments grew 18% in volume terms over this period.
Andhra Pradesh is the top marine exporting state in the country with an impressive CAGR of 15%, followed by Gujarat and West Bengal with almost a CAGR of 10%, roughly at par with the country’s overall growth. Other contributing states are Kerala and Maharashtra.
In terms of the export market, the US is the largest market for Indian shrimp while China and Vietnam are the largest importers of Indian frozen fish and mollusks, respectively. Together, these three countries make up about 50-60% of India’s marine export market. However, with the tightening of regulations by the US Food and Drug Administration (FDA) and the National Oceanic & Atmospheric Administration (NOAA), Indian shrimp exporters are now sailing amid choppy waters.
Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital said, “Indian shrimp exports to the US face stringent quality checks and scanning along with a hike in anti-dumping duty to 2 .34% from 0.84% in 2018, which has had a negative effect on the shipment volumes.” 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 EU. This has led to the implementation of tougher norms in these regions, which has further increased the pressure on Indian exporters.
“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, value-added products. Further, 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,” Mukewar added.
On the other side, amid the US-China trade war, China is also opening as a potential market for Indian marine exporters. This could also translate into further growth possibilities for Indian marine exports in East Asia.
