Last Updated : Wednesday, December 25, 2019 19:54:14

Indian Marine Exports to remain Damp, says Drip Capital Report

MUMBAI | AHMEDABAD-GANDHINAGAR | RAJKOT – In a press-release shared by US based trade finance company Drip Capital Ltd regarding its report on outlook of Marine Exports, it said of the Indian Marine Exports primely to US and EU is expected to remain damp, primely due to stringent quality norms, consumer preference and anti-dumping duty laid on marine product exports from India.

The press release titled, “Indian Marine Exports to remain Damp; Value Addition and Diversification key to Boost Trade: Drip Capital Report,” further read that, India exported nearly $6.3 billion (around Rs. 45,000 crores) worth of marine products in FY2019 with shrimp contributing almost 70% to total marine export shipments, of which Andhra Pradesh is the top marine exporting state in the country, followed by Gujarat and West Bengal.


The press release further read that, Tightening of regulation in the US and EU markets has severely impacted Indian shrimp exports and Exporters should invest in value addition, infrastructure along with product and market diversification to revive growth.

US-based trade finance company Drip Capital has released a report detailing India’s marine exports sector.

Chalking out detailed insights from proprietary data and on-ground conversations with exporters, the report analyses India’s marine exports, wherein shrimp, frozen fish, and mollusks are major export commodities, with shrimp contributing 71% of India’s total marine export shipments.

According to the Directorate-General of Foreign Trade (DGFT), India exported nearly $6.3 billion (around Rs. 45,000 crores) worth of marine products in FY2019.



The sector reported a CAGR of 13% between FY2010 to FY2019.

However, it declined by 9% from FY2018 to FY2019 (in shipment value terms), even though shipments grew 18% in volume terms over this period.

Andhra Pradesh is the top marine exporting state in the country with an impressive CAGR of 15%, followed by Gujarat and West Bengal with almost a CAGR of 10%, roughly at par with the country’s overall growth. Other contributing states are Kerala and Maharashtra.

In terms of the export market, the US is the largest market for Indian shrimp while China and Vietnam are the largest importers of Indian frozen fish and mollusks, respectively.



Together, these three countries make up about 50-60% of India’s marine export market.

However, with the tightening of regulations by the US Food and Drug Administration (FDA) and the National Oceanic & Atmospheric Administration (NOAA), Indian shrimp exporters are now sailing amid choppy waters.

Pushkar Mukewar, Co-Founder and Co-CEO, Drip Capital said, “Indian shrimp exports to the US face stringent quality checks and scanning along with a hike in anti-dumping duty to 2 .34% from 0.84% in 2018, which has had a negative effect on the shipment volumes.” Other factors impacting Indian marine exports include a change in consumer preferences and an increase in quality consciousness in traditional markets for marine exports like the EU. This has led to the implementation of tougher norms in these regions, which has further increased the pressure on Indian exporters.”



“Quality concerns from buyer markets, particularly in the West, are going to remain a big challenge for Indian farmers who face increasing competition from other markets offering high-quality, value-added products. Further, while Indian marine exports have long relied only on Vannamei shrimp. Over-reliance on exporting one specific product is unlikely to be a sustainable long-term strategy,” Mukewar added.

On the other side, amid the US-China trade war, China is also opening as a potential market for Indian marine exporters.

This could also translate into further growth possibilities for Indian marine exports in East Asia.


ABOUT DRIP CAPITAL 

Drip Capital is a California and India headquartered fintech company, focused on solving the working capital problem for SME exporters using technology.

The company was founded by Pushkar Mukewar and Neil Kothari, both roommates at Wharton.

The 120-member team now comprises of engineers, data scientists and trade finance veterans across offices in Palo Alto, Mexico City, Dubai and three offices in India – Mumbai, Delhi and Bengaluru.


Drip has strategic partnerships with a number of key export promotion organizations, including FIEO (Federation of Indian Export Organizations) and EEPC (Engineering Export Promotion Council).

Drip’s working capital offering to exporters is a credit line, which ranges from USD 100 thousand to USD 2.5 million, depending on the exporter’s size and requirement.

The financing is unsecured and offered without any collateral. Exporters can apply to Drip by completing a 10-minute online application, requiring minimal paperwork.

Drip uses electronic data and an automated risk assessment platform, thereby ensuring a quick turnaround of 48 to 72 hours. https://www.dripcapital.com/


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