In India’s Budget 2022 announced on February 1, the import duty cuts look good for the aquaculture industry and seafood sector in general, but confusion prevails in the industry over the impact of Budget 2022 notifications on its seafood sector. India’s Finance Minister had announced that “duty is being reduced on certain inputs required for shrimp aquaculture so as to promote its exports,” quoted the news site, www.moneycontrol.com.
On the face of it, the report commented that it looks good for the aquaculture industry and the seafood sector in general. But it seems the concessions are only for a limited period, from February 2 to May 1, 2022. The picture is still unclear. The aquaculture sector accounts for a major share of nearly USD 7-billion annual seafood export from India.
The government said it has removed the import duty on shrimp broodstock, Artemia, frozen, krill, mussels and squid used as feed in hatcheries. It has also waived the import duty on shrimp feed.
According to sources in the Marine Products Export Development Authority (MPEDA), the move is expected to bring down the production cost of farmers who have been hit by rampant diseases in shrimp farming, lower prices for shrimp and Covid-19 related logistics problems.
The industry is heavily dependent on Artemia and shrimp broodstock, imported by hatcheries for post larvae production. The import duty on vannamei and black tiger broodstock and on Artemia was 10%. Removal of this duty will help the industry to import more for higher production. India imports around INR 300 crore (USD 40 million) of Artemia annually. Of the total shrimp exported from the country, nearly 90% is vannamei shrimp.
The 15% import duty on frozen krill, squid and mussels used as feed in shrimp hatcheries, has been removed. Both squid and mussels are available in India, but the hatcheries prefer to import pathogen free stocks.
The import duty of 5% on shrimp feed has been waived. The move was cheered by the aquaculture sector though it may impact local feed millers. Feed prices rose last year as soybean, the main plant protein meal in the feed, became costlier.
Of the targeted USD7.8-billion seafood export in the current year, the seafood industry has reached USD6.6 billion in the first three quarters. But the industry is rattled by freight hike increases, shortage of containers and lower incentives under remission of duties and taxes on exported products (RoDTEP). The incentive ranges from 0.5 to 2.5% against 5% earlier. The budget has not addressed these issues which concern the exporters.
