BackCustoms duty revamp gives fisheries sector a boost
The Union budget announced a sharp reduction of basic customs duty from 30% to 10% on live black tiger shrimp, which farmers use for breeding
PremiumIndia’s fisheries sector has emerged as a key beneficiary of the customs duty rejig to boost local production, even as much of the attention has been focused on the manufacturing industry.
The Union budget announced a sharp reduction of basic customs duty from 30% to 10% on live black tiger shrimp, which farmers use for breeding, and from 30% to 15% on both frozen krill, a feed for fish, and on algal oil derived from certain marine algae for making aquatic feed.
These inputs used in shrimp culture were given relief on basic customs duty as India is a major exporter of shrimps and there are several farms in coastal Andhra Pradesh and Tamil Nadu, Central Bord of Indirect Taxes and Customs (CBIC) chairman Vivek Johri said in an interview.
To support the food processing sector, the duty on frozen squids and mussels, a shell fish, too was halved to 15%. Increasing farmers’ income is a policy priority for the government, including for those in the fisheries sector, Johri said.
Industry representatives said the move was beneficial but more could be done. “The finance ministry has reduced import duty only on black tiger shrimp from 30% to 10% which is really commendable and helpful for the aquaculture industry. But right now, more than 95% shrimp import consists of L. Vannamei shrimp. So, it would be highly beneficial if the import duty is reduced on that as well," said Prathipati Veerabhadra Kumar, managing partner of Srinidhi Biotechnologies, a hatchery based in Andhra Pradesh.
Kumar said the hatchery industry is heavily dependent on feed necessary for shrimp from other countries, and it would be helpful if the import duty is reduced on that as well since there are relatively less number of indigenous shrimp feed manufacturers. Kumar also said hatcheries need incentives given that they take the initial high risks of importing live shrimps and have a limited window period for selling to farmers without compromising quality and safety.
The government is also running a five-year scheme -- Pradhan Mantri Matsya Sampada Yojana -- up to FY25, aimed at addressing the gaps in the fisheries value chain from fish production to post-harvest infrastructure and marketing. Under this scheme, India has set a fisheries export target of Rs. 1 trillion, additional seven million tonnes of fish production, and generation of 5.5 million jobs over the years. The policy priority is to help achieve a ‘blue revolution’ through sustainable and responsible development of the fisheries sector.
India’s marine product exports have been growing robustly, and a big part of it is due to shrimp exports. Frozen shrimp makes up 74% of India’s marine product exports in dollar terms, followed by frozen fish and frozen squids.
As per provisional estimates from the commerce ministry, export of marine products grew 35% to $6.1 billion during the April-December period of 2021 compared to $4.5 billion in the same period the previous year. In the April-December period of 2019, India had exported $5.5 billion of marine products. In December 2021, marine product exports touched $720.5 million, showing a 28% growth over the year-ago period. The government expects exports to touch an all-time high, exceeding the $7 billion seen in FY18, despite the impact of the pandemic.
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