Kochi: Dealing a blow to Indian shrimp exporters, the New York-based US Court of International Trade, or CIT, last week blocked the refund of about Rs60 crore due to them following a recent reduction in anti-dumping duty.
The ruling came on a petition by the US-based Southern Shrimp Alliance, or SSA, challenging the duty cut ordered by the US department of commerce on shrimp exports for the period from February 2006 to January 2007.
Some 68 Indian firms export shrimp to the US but, only two—Devi Sea Foods Ltd and Falcon Marine Exports Ltd—were considered for the review of the anti-dumping duty because they are among the largest.
Devi Sea Foods, the country’s largest shrimp exporter to the US, with a 15% share in the Rs1,143 crore that India earned between February 2006 and January 2007, had its duty cut to 0.35% from 4.93%. The firm does not have to pay any duty because a levy below 0.5% is not treated as anti-dumping duty. The duty on Falcon, which has a 12% market share of exports, fell to 1.69% from 4.39%.
SSA had initiated anti-dumping proceedings in 2003 at CIT, arguing that India was selling its shrimp to the US at a price lower than what it was charging from other countries. Following this, the department of commerce imposed a 10.17% anti-dumping duty on Indian shrimp in 2004.
After the first review in 2007, the duty was reduced to 7.22% and in July 2008, after the second annual review, it was pared further.
P. Bramhanandam, managing director of Devi Sea Foods, said the latest ruling by CIT is a major blow to the industry, adding that his firm, along with Falcon, will challenge it. He said SSA at the recent review had contested the stand of the two Indian firms that submitted records of their exports to prove they had not been dumping shrimp on the US.
If the court sees merit in the alliance’s case, the matter will be sent back to the US department of commerce for re-examination, leading to a repeat of the review that could take two years or more.
T.R. Patnaik, chairman and managing director of Falcon, favoured challenging the system of calculating anti-dumping duty. According to him, US authorities have not been following the norms while deciding on the duty. Normally, there is a “fixed price” for shrimp exports that is also called “fair value” and if a firms sells below this, it is considered dumping.
“One must consider selling prices at all levels and impose duty when the average price is higher than the fair value. But this has not been happening,” he said.
G. Mohankumar, chairman of the Marine Products Export Development Authority, the government trade promotion body, termed CIT decision a blow to shrimp exporters and said the authority will support them in their fight.