Vietnam, India square off over Japan seafood market

India will face tough competition from Vietnam for seafood exports as the latter signed a free-trade agreement with Japan--the biggest importer of India's shrimp products, the Seafood Exporters Association of India (SEAI) said.

 

Japan accounts for 16 percent of India's overall marine exports last year.

 

With this move, Japan's top shrimp suppliers, Indonesia, Vietnam and Thailand, have all bagged duty free status for their seafood exports to the Far-Eastern country.

 

The Vietnam-Japan pact removes the 10 to 15 percent duty which was the trend of Vietnamese shrimp, lobsters and other seafood imports into Japan.

 

Japan's top shrimp suppliers-- Indonesia, Vietnam and Thailand-- accounted for 17,920 tonnes, 15,632 tonnes and 10,412 tonnes, respectively, during 2008.

 

India is the fourth largest exporter of shrimp products to Japan and its shipments to the Japanese market have been on the downward trend in recent years.

 

Though shrimp was quite predominant, Indian seafood exports to Japan included crab meat, lobster, squid and octopus.

 

In value terms, seafood exports to Japan dipped from Rs 1,353 crore to Rs 1,237 crore in 2007-08.

 

Indian traders fear that its seafood exports will dip further as the top three shrimp exporters to the Japanese market are gaining duty free status.

 

The Vietnam-Japan free trade agreement comes at a time when Indian shrimp exports are already feeling the pinch from fierce competition from other low-cost producing countries and falling demand due to recession gripping major developed countries, sources in SEAI warned.

 

 

According to the agreement, Vietnam will get duty-free access to the Japanese markets for as many as 7,264 items including shrimp products, a report by the Information and Trade Promotion Centre of Ho Chi Minh city, which is an official Vietnam government agency specialising in facilitating trade and investment said.

 

The zero tariff of Vietnam is likely to hurt Indian seafood exports in cost-competitive market like Japan. While duty on Vietnamese exports has been waived, Indian seafood exports continue to attract 2.5 to 15 percent duty into the Japanese market.

 

Since a time lag is expected to between the signing of the trade pact and its actual implementation, Indian seafood exports are unlikely to be dented this year.

 

But the true impact could become visible in exports next year, seafood exporters warn.