February 13, 2007

India's shrimp exports halved by US anti-dumping duties
 

Anti-dumping duties have halved the volume of Indian shrimp exports to the US.

Although India would soon face another administrative review of its current duties, it is not clear whether the duties would go up or down.

The anti-dumping duty of 10.17 percent, coupled with a matching customs bond, has caused a sharp decline in Indian shrimp exports to the US during 2006 from US$485 million in 2005 to US$252 million during 2006.

The duty and bonds have already forced several exporters out of the market there towards markets like the EU.

However, things may be looking up for Indian shrimp exporters in the US markets for three reasons.

Firstly, shrimp exporters to the US have taken heart from a recent WTO ruling against the US that its practice of zeroing with respect to its shrimp duties on Ecuador is illegal.

Secondly, more Indian shrimp exporters seem reluctant to pay huge sums of money to their competitors in the US in settlements. The Indian shrimp industry has been paying off the Southern Shrimp Alliance (SSA) in the US, who had been charging that India's cheap shrimps are unfairly hurting the shrimp industry. These payoffs had been in the form of settlements in order for Indian exporters to avoid being subjected to an administrative review by the Department of Commerce, who might have adjusted the duties even higher. The payoffs collected by the SSA are then redistributed to the US shrimp industry.

However, talk is rife in the industry that the Southern Shrimp Alliance may not be the only shrimp group eager for a piece of the pie and others may be on the way, expected to be paid off.

Thirdly, exporters were better prepared for the second review since the number of exporters to the US had been reduced and their books and deals had been properly scrutinised. In case it went ahead with an appeal against the US, there was every possibility of the duties for the companies to be cut significantly.

Still, challenges remain for the Indian exporters. Although the US did not challenge the WTO ruling, it could simply ignore it as it had with other WTO shrimp violations such as the Byrd Amendment.