US trade panel rules in favour of shrimp imports from India

US regulators have ruled in favour of India in their investigations into the alleged dumping of frozen shrimp by India and four other countries and ruled against imposing countervailing duty on shrimp imports from India, bringing great relief to Indian shrimp industry and its exports.

The United States International Trade Commission (USITC) determined that the US industry is neither materially injured nor threatened with material injury from imports of frozen warm water shrimp from India, China, Ecuador, Malaysia, and Vietnam.

USITC voted 4-2 against imposition of countervailing duty (CVD) against India and the other countries. As a result, the US Department of Commerce will not issue orders to impose countervailing duty on imports of these products from India and the other four countries.

The US authorities started investigations into import of frozen shrimp from India and the other four countries following a petition filed by the Coalition of Gulf Shrimp Industries (COSGI) in the US on behalf of its 28 member companies on 28 December 2012, claiming that subsidies provided by government of India to the Indian shrimp industry resulted in Indian exporters selling their products at lower prices, providing an unfair advantage for Indian shrimp exports to the US.

Following this, Leena Nair, chairman, MPEDA, had consultations with the US Department of Commerce on the subject matter and had meeting with USITC on 14 January 2013.

The MPEDA chairman also attended the conference / USITC hearing in connection with the investigation.

US Department of Commerce had issued a questionnaire to the Indian government on 14 February 2013, and selected two major shrimp exporters from India as mandatory respondents.

On 28 May 2013, the US Department of Commerce preliminarily determined that countervailable subsidies are being provided to producers and exporters of certain frozen warm water shrimp (frozen shrimp) from India and determined a cash deposit rate of 5.91 per cent for exports made from India.

The preliminary determinations were favourable for exports from countries like Ecuador, Indonesia.

In order to verify the records submitted by the mandatory respondents, US Department of Commerce officials visited India to verify the subsidy details submitted by the Indian government.

On 13th August 2013, US Department of Commerce announced its affirmative final determinations in countervailing duty investigations of imports of certain frozen warm water shrimp from Ecuador, India, Malaysia, China, Vietnam and a negative final determination for Indonesia and Thailand.

Exporters from India have been assigned a subsidy rate of 10.84 per cent. In preliminary determination, Ecuador was excluded from CVD. However, in final determination, a higher CVD rate was assigned.

As some of the alleged schemes in India were terminated during the period of investigation, Department of Commerce has finally determined a cash deposit rate of 5.85 per cent for exports made from India.

Final results on CVD for Vietnam (4.52 per cent), China (18.16 per cent) & Malaysia (54.5 per cent), Ecuador (11.68 per cent) were also announced.

Indonesia and Thailand received a 'de minimis' (0 per cent) subsidy rate in final CVD determinations. The final determinations were favourable for exports from countries like Thailand and Indonesia and these countries escaped from countervailing duties.

Due to the CVD cash deposit rate (5.85 per cent) and present level of anti-dumping duty (3.49 per cent), Indian shrimp exports to USA would have been costlier than any of its closest competitors.

Moreover if countervailing duty was imposed, it would have helped Thailand and Indonesia to monopolise the US shrimp market.

Department of Commerce instructed US customs and border protection to order cash deposits equal to the final subsidy rates if the USITC issues final positive injury determinations. Thailand and Indonesia was excluded from CVD in final determination.

But the ruling by USITC, which is the last step in this investigation, came in favour of India and the other countries, negating the USDOC's decision.

USITC today determined that the US industry is neither materially injured nor threatened with material injury by reason of imports of frozen warm water shrimp from India and four other countries. Due to this none of the seven countries including India are required to pay duties for their shrimp exports to US.