By IANS
Kochi (Kerala) : Indian seafood exporters are clamouring for central intervention to offset the recent strengthening of the rupee, and want a mechanism to reduce their high bank-interest burden.
An industry body said that appreciation of the rupee has caused more damage than the 2004 tsunami. The rise of rupee has resulted in losses of over Rs.5 billion to exporters on existing stock.
A.J. Tharakan, president of the Seafood Exporters Association of India (SEAI) Monday asked the centre, especially the finance and commerce ministries, to intervene by providing incentives to offset the rupee appreciation fallout and also put in place some mechanism so that their high bank interest burden is reduced.
In a statement here, he said the seafood export industry now requires major support by substantially lowering interest costs for pre- and post-shipment finance, removing all forms of service tax on exports and providing higher rates to make Indian seafood internationally competitive.
“Seafood exporters are reeling under the impact of the sharply appreciating rupee. They are unable to compete with Asian competitors like China, Vietnam and neighbouring seafood exporting nations like Bangladesh and Sri Lanka,” said Tharakan.
Indian seafood exporters are finding their products being out-priced in the major markets of the US, Japan and the EU due to the strong rupee.
“A major portion of the price comprises raw material cost. It is difficult for exporters to lower price paid to fishermen or aqua farmers in line with the appreciating rupee because, beyond a certain minimum price, it will not be viable for either the fishermen to go out to sea due to the cost of fuel or the aqua farmer to culture shrimp or fish due to the high cost of inputs,” added Tharakan.
Seafood exports now account for Rs.80 billion and it is the export of high-value products like shrimp, squid, cuttlefish and crab that sustain the sector in India.
On account of the imposition of antidumping duty in the US for Indian shrimp, the number of shrimp exporters from India to that country has come down from 258 in 2001 to 80 in 2007.
The situation, according to the SEAI, is grave because over 16,200 fishing vessels, 120,000 country crafts and 2 million fishermen depend on the seafood industry.