February 25, 2005

Indian seafood exporters petition for aid

The Seafood Exporters Association of India (SEAI) has sought a Rs 115.3-crore write off package to help the 150-sick seafood units now under the debt recovery tribunal. This should help restructuring and consolidation of the industry to meet Asian competition, it has said.

SEAI president AJ Tharakan is in Delhi to hold discussions with the commerce ministry in this matter, according to Forum for Revival and Reconstruction of Seafood Export Industries president Antony Varghese.

The forum had held several rounds of discussions with various departments and had also submitted a memorandum to Prime Minister Manmohan Singh. It had initiated steps for the merger of a few companies to form a consortium.

Mr Antony said the plague in Surat in 1995, the Supreme Court strictures on aquaculture in 1997, European Commission ban on Indian imports the same year and the South-east Asian currency crisis the next year, etc., have pushed the seafood industry into the red and around 150 of them turned terminally sick.

These units had a total loan of around Rs 225 crore and had paid interest of almost Rs 125 crore. The banks had earned an amount equivalent to the loan amount. Though the forum had taken up the matter with the Indian Banks Association, revenue recovery procedures were on.

As per the details of the package sought, the total packaging credit loan amount was Rs 222.15 crore of which 66% i.e., Rs 146.62 crore had been received by banks through the ECGC guarantee amount. The amount to be written off was Rs 75.53 crore. SEAI which had taken up the matter along with the Marine Products Export Development Authority (MPEDA) has sought a three-point exit option for the units on a one-time basis.

The sick units should to allowed a one-time settlement of their term loan outstanding at 20% of the principal amount within 12 months and an inter-ministerial committee should be set up for examining and approving the scheme within a time-frame.