January 21, 2009

India's marine product exports are likely to face tremendous pressure from Vietnam after the country signed a free-trade agreement (FTA) with Japan, the largest importer of India's shrimp products.

 

According to the agreement, signed last month, Vietnam will reportedly get duty-free access to the Japanese market for as many as 7,264 items, including the shrimp products.

 

Japan accounted for 16 percent of India's total overseas sales of marine products in 2007-08.

 

The duty-free access to Vietnam, another major exporter of marine items, is set to make its products cost-competitive in the Japanese markets, compared to the Indian products.

 

India exported 67,373 tonne of marine products including shrimp, crab meat, lobster, squid and octopus to Japan in 2007-08 against 67,437 tonne in 2006-07. In value terms, exports dipped to Rs 1,237.59 crore from Rs 1,353.38 crore.

 

Japan already provides duty-free access of some marine products from countries like Singapore, Mexico, Malaysia, Chile and Thailand. However, the duties for some other products range between 2.3 percent and 9.1 percent.

 

For other countries, including India, the tariff rate is from 2.5 percent to 15 percent, depending on the types of products.

 

An expert said that even before the FTA was signed, India's exports of marine products to Japan were declining, in sync with the fall in the overall shipments of such items and the signing of the pact would only aggravate the situation,.

 

Indian Marine Products Export Development Authority (MPEDA) official said the impact can be gauged after two months.

 

Indian marine products exports to all countries were 541,701 tonnes worth Rs 7,620.92 crore in 2007-08, compared to 612,641 tonnes worth Rs 8,363.53 crore in 2006-07.

 

The MPEDA official said exports to Japan have come down but those to other South East Asian countries are going up.

 

India is the fourth-largest exporter of shrimp products, just behind Indonesia, Japan and Thailand.