China has emerged as a major alternative market for Indian shrimp exporters who were hit hard by the 50% tariff imposed on the South Asian nation’s shipments by the US on August 27, reported Mint.
China is already known for its seafood processing and re-export capabilities. Supported by strong domestic demand, the country has stepped in with forward contracts. Forward contracts are agreements to buy or sell a specific product at a pre-negotiated price on a future date.
Shaji Baby John, Chairman and Managing Director of Kings Infra Ventures Ltd, a Kerala-based shrimp exporter told Mint that the imposition of tariff has turned out to be “a blessing in disguise” for Indian shrimp exporters. Calling China as one of the most promising markets for Indian shrimp exporters, John predicted that the country is likely to become the top importer of Indian shrimps in the near future.
Why China Helps
Experts told Mint that the US tariff shock has increased the importance of China which was once treated as a secondary market by the Indian shrimp exporters. As Chinese processors procure raw material from India and process seafood for re-export to duty-free markets, country can help mitigate the impact of tariffs on Indian exporters. Indian exporters are also trying to get into other markets besides China, such as Europe, the UAE, Japan and South Korea.
According to Mint, those who have contracts with the US are talking to buyers about splitting the cost of the tariff and at the same time taking advantage of domestic demand in cities like Delhi-National Capital Region, Bengaluru, Hyderabad and Coimbatore.
A Global Trade and Research Initiative (GTRI) report stated that India’s seafood exports to the US dipped sharply after tariffs increased to 50%.
Shrimp exporters told ET that the blanket 50% tax has been imposed by the US on all imports from India, while the shrimp industry has already been paying a countervailing duty of 5.77% and anti-dumping duty of 2.65%. Exporters have been reeling under significant pressure and the recent tariffs have further squeezed the Indian shrimp industry.
According to reports, US President Donald Trump levied a 50% tax, taking effect from August 27, on the Indian seafood exports including shrimp.
