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New US norms on seafood imports may cool demand for Indian shrimps: Icra

The US is a major market for India's seafood exports and is valued at $7 billion

Nirmalya Behera  |  Bhubaneswar 

India largest seafood exporter in 2016: FAO

New regulations in the United States (US) for shrimp imports, the Import Monitoring Program (SIMP), enforced on Monday, might curtail demand for Indian in the country.

The revised norms mandate stringent data requirements to trace the entire supply chain of from the point of harvest to the point of entry into the US. It establishes reporting and record-keeping requirements for imports of certain products, to combat illegal, unreported, and unregulated seafood from entering the US.

“The SIMP requirements for the shrimp supply chain are expected to create temporary headwinds for export of Indian shrimps, harvested in unregistered farms. While most of the medium and large Indian shrimp exporters to the US and the European Union use registered farms, to Vietnam go both from registered and unregistered farms. This would hamper Vietnam’s re-export prospects to the US (owing to the lack of traceability), in turn curtailing Indian demand temporarily,” said Pavethra Ponniah, vice-president and sector head, corporate sector ratings, Icra.

The $7-billion US market is a major destination of seafood from India, which has a 32 per cent share. In the last fiscal year, the US imported seafood worth $2.3 billion. Frozen shrimp is the principal export item to the US, with a share of 95.03 per cent.

Icra expects Indian shrimp export volume growth to slow down to 7-10 per cent in 2019 after a period of robust compounded annual growth rate of 17 per cent from 2013 to 2017.

Trade sources said smaller exporters might find it extremely difficult to ship to the US, their largest market by value.

“The SIMP has been conceived in a very proper way for sustainable fisheries in the world to eliminate unregulated practices in aquaculture. Currently, about 90 per cent of the SIMP requirements have been met for sending shipments to the US,” said Rajen Padhi, director-general, Utkal Chamber of Commerce and Industry, and a seafood consultant.

First Published: Mon, December 31 2018. 22:08 IST