India’s Marine Exports May Remain Sluggish In Coming Quarters: Report
While marine exports as a whole have grown in the last few years, the pace of growth slowed down significantly in recent quarters.
India's marine exports are expected to remain sluggish due to challenging conditions like tightening of quality regulations by traditional markets like the U.S. and the EU and the depreciating rupee, according to a report.
While marine exports as a whole have grown in the last few years, the pace of growth slowed down significantly in recent quarters, mainly on account of rise in international competition and stringent trade conditions, according to a report by U.S.-based trade finance company Drip Capital.
The report revealed that going forward these conditions are likely to persist and overall marine exports are likely to remain subdued in the coming quarters.
"Indian shrimp exports to the U.S. face stringent quality checks and scanning along with a hike in anti-dumping duty to 2.34 percent from 0.84 percent in 2018, which has had a negative effect on the shipment volumes," Drip Capitalcofounder and co-Chief Executive Officer Pushkar Mukewar said.
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, he added.
"This has led to the implementation of tougher norms in these regions. 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.
As much of the slowdown stems from traditional markets like the EU, and to a certain extent, the U.S., the report suggested that exporters should venture into new and alternative markets for their shipments.
According to the Directorate-General of Foreign Trade, India exported nearly $6.3 billion worth of marine products in FY19, while the total global trade was estimated to be a little over $100 billion.
Value-addition to the country's marine exports, including ready-to-fry or cook, canned and cleaned products, is also going to be a crucial component in this effort. The value addition creates almost 25 percent difference to a marine product, the report said.
India should look to its Southeast Asian neighbours, especially Vietnam, to see how simple value additions to the supply chain could make a big difference in boosting exports.