Confusion prevails in the industry over the impact of Budget 2022 notifications on seafood sector. Finance Minister Nirmala Sitharaman announced in her speech: “duty is being reduced on certain inputs required for shrimp aquaculture so as to promote its exports.’’
On the face of it, it looks good for the aquaculture industry and seafood sector in general. But it seems the concessions are only for a limited period, from February 2 to May 1, 2022. This is still being debated in the industry and the picture is yet to be clear.
Aquaculture sector accounts for a major share of nearly $7-billion annual seafood export from the country.
The government said it has removed the import duty on shrimp broodstock, artemia (small shrimp used as live feed) and frozen, krill, mussels and squid used as feed in hatcheries. It has also waived the import duty on prawn feed used in aquaculture farms.
According to sources in Marine Products Export Development Authority (MPEDA), the move is expected to bring down the production cost of aquaculture farmers who have been hit by rampant diseases in the farms, lower prices for shrimps and Covid-19 related logistics problems.
The shrimp aquaculture industry is heavily dependent on the import of larval seeds, artemia and shrimp broodstock as there is hardly any production in the country. These are imported by hatcheries for growing shrimp larvae to supply to aquaculture farmers.
The import duty on broodstock of Vannamei and Tiger shrimps and on artemia was 10%. Removal of this duty will help the industry to import more for higher production. India imports around Rs 300 crore worth artemia a year. Of the total shrimps exported from the country, nearly 90% is Vannamei variety.
The 15% import duty on frozen krill, squid and mussels used as feed in shrimp hatcheries, has also been removed. Both squid and mussels are available in India, but the hatcheries prefer to import as it will be free from pathogens.
The import duty of 5% on prawn feed used in the farms has been waived. The move has been cheered by the aquaculture sector though it may impact the local feed manufacturing companies. The feed prices had escalated last year as soybean, the main ingredient in the feed, became costlier. The shortage of soybean forced several feed companies to even import the product.
Of the targeted $7.8-billion seafood export in the current year, the seafood industry has reached $6.6 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.
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