According to the Directorate-General of Foreign Trade (DGFT), India exported nearly $6.3 billion (around Rs. 45,000 crores) worth of marine products in FY2019. The sector reported a CAGR of 13% between FY2010 to FY2019. However, it declined by 9% from FY2018 to FY2019 (in shipment value terms), even though shipments grew 18% in volume terms over this period.
Andhra Pradesh is the top marine exporting state in the country with an impressive CAGR of 15%, followed by Gujarat and West Bengal with almost a CAGR of 10%, roughly at par with the country’s overall growth. Other contributing states are Kerala and Maharashtra.
In terms of export markets, the US is the largest market for Indian shrimp while China and Vietnam are the largest importers of Indian frozen fish and mollusks, respectively. Together, these three countries make up about 50-60% of India’s marine export market. However, with the tightening of regulations by the US Food and Drug Administration (FDA) and the National Oceanic & Atmospheric Administration (NOAA), Indian shrimp exporters are now sailing amid choppy waters.
Indian shrimp exports to the US are facing increasingly stringent quality checks and scanning along with a hike in anti-dumping duty to 2.34% from 0.84% in 2018, which has had a negative effect on the shipment volumes. Changes in consumer preferences, such as the move away from white meat consumption in Japan, and an increase in quality consciousness in traditional markets like the EU have also contributed to the negative outlook for India's marine exports.
Quality concerns from buyer markets, particularly in the West, are going to remain a big challenge for Indian farmers who face increasing competition from other markets offering high-quality, value-added products. Vietnam, in particular, is rapidly threatening India's much-vaunted shrimp exports, with value-added products and favorable trade agreements making the Southeast Asian country a serious competitor in international trade. Further, while Indian marine exports have long relied only on Vannamei shrimp, over-reliance on exporting one specific product is unlikely to be a sustainable long-term strategy.
On the other side, amid the US-China trade war, China is also opening as a potential market for Indian marine exporters. This could also translate into further growth possibilities for Indian marine exports in East Asia. If India's marine exports are to resume growth in the coming quarters, value-addition, diversification into new markets, and better quality control will become crucial focus areas for exporters and other stakeholders.
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