Kochi: It is a double victory for Indian shrimp exporters to the US. The disputes panel of the World Trade Organization (WTO) has ruled against the US requirement of a cash guarantee on consignments to cover for further rise in the anti-dumping rates, while the US department of commerce has, in a preliminary ruling, cut the anti-dumping duty on Indian shrimp from 7.22% to 1.06%.
The US had initiated anti-dumping duty on Indian shrimp since 2004 as it claimed India was selling shrimp to it at a price lower than that to any other country. The duty was initially fixed at 10.17% and after the first annual review for the period August 2004 to January 2006, it was cut to 7.22%. The preliminary report on the second annual review for the period February 2006 to January 2007 was released on Friday. The final report is expected in September.
In addition to the duty is the cash guarantee, or customs bond. The bond is calculated at 100% of the duty payable on total exports in the previous year and has a one-year validity, forcing exporters to take fresh bonds every year. India had challenged this before a WTO disputes panel in 2006. It now remains to be seen if the US challenges the ruling, which may delay its implementation.
Besides, the panel’s confirmation of the preliminary findings against the US practice of zeroing for calculating anti-dumping duty comes handy for India. Under this, shrimp sold above a fixed price termed as fair value are ignored and only those below that level are considered for calculating the anti-dumping duty. India is expected to challenge this practice soon, said Elias Sait, secretary general of the Seafood Exporters Association of India.
During the second review by the US, accounts of the two top shrimp exporters were taken as samples. As per the preliminary determination, the duty for Devi Seafoods Pvt. Ltd has been cut from 4.38% to 0.7% and for Falcon Marine Exports Pvt. Ltd from 4.06% to 1.6%. Based on this and the total quantity exported by the two firms, the duty payable by others has been fixed at 1.06%.
P. Bramhanandam, managing director of Devi Seafoods, said if zeroing is done away with, the duty could fall below the 0.5% level and India would be out of the duty ambit.
The duty and the bond have been chiefly responsible for the decline in India’s shrimp exports to the US to 20,776 tonnes in 2007 from 27,277 tonnes the previous year.