THE Indian shrimp farming industry has been thrown into a spin following the news that it is facing a near threefold increase in tariffs on shrimp imports into the United States.
The move by the US Department of Commerce is being seen as an anti-dumping measure and the proposal is to raise duties from the current level of 0.84 per cent to 2.34 per cent.
The news hit the share prices of Indian fish farming and shrimp feed companies yesterday, with falls of up to six per cent.
But the industry is being urged to remain calm as a similar move was proposed last year only for the final figure to be revised down to 0.84 per cent.
Observers think that the same could well happen again as the Department of Commerce figure is only an outline proposal at the moment and has yet to be ratified.
The United States remains India’s largest market for seafood, with exports totalling almost $6 billion. But it is not the only market.
Shrimp exports overall (known in the UK as warm water prawns) increased by around 20 per cent last year, with Japan, Vietnam, China and now Europe taking large quantities.
Nevertheless, India is gearing up for a possible trade duel with the US. The dispute has parallels with recent European concerns over higher tariffs on steel and aluminium exports into the US which also threatens a trade war.
If the new shrimp import tax goes ahead, it will lead to calls for counter measures to be taken against US exports to India, although in trade terms the advantage clearly lies with the US.
The dispute may be taken to the World Trade Organisation (WTO).
Demand for Indian frozen shrimp on international markets has been growing at an impressive rate. The United States alone imported 1.88 million tonnes of Indian seafood last year, a growth of 22 per cent.