The India-EU Free Trade Agreement: A Game Changer for the Marine and Seafood Industry

As India and the European Union (EU) finalized their free trade agreement (FTA) on Tuesday, a surge of anticipation and excitement swept through various sectors in both regions. Among the most likely beneficiaries of this landmark deal, often dubbed the “Mother of all deals,” is the marine and seafood industry. With India’s seafood and shrimp sector currently grappling with a hefty 50% tariff imposed by its largest export destination, the United States, the FTA opens the door to significant opportunities.

Tariff Reduction: A Level Playing Field

One of the most striking features of the FTA is the reduction of tariffs on Indian seafood exports to the EU from 26% to zero. Divya Kumar Gulati, Chairman of the Compound Livestock Feed Manufacturers Association (CLFMA), emphasizes that this change will position Indian seafood on par with competitors like Vietnam and Ecuador, who have historically enjoyed preferential market access. “This zero duty effectively removes a major cost barrier,” Gulati explained, highlighting how competitive pricing can transform the landscape for Indian exporters.

The Impacts of Tariff Elimination

Pavan Kosaraju, CEO of AquaExchange, echoed Gulati’s sentiments, noting that shrimp will also be included under the zero-tariff category. This shift is expected to yield notable benefits within six to nine months as Indian exporters gear up for increased demand. With the EU market valued in the tens of billions of dollars, the projected surge in Indian seafood exports couldn’t come at a better time.

Gyanendra Tripathi, Partner & Leader at BDO India, pointed out that the FTA not only eliminates tariffs on seafood but also reduces duties on various ingredients crucial for processing. “This means that Indian exporters can produce more competitive products, enhancing quality while improving margins,” he noted. The potential for a 20-40% increase in exports is a strong indicator of the growth prospects that lie ahead.

Processing and Quality Standards

However, with great opportunity comes the need for stringent quality measures. Kosaraju warns that while access to the EU market is a significant win, it comes with high-quality expectations. India will need to adapt to rigorous standards, including certifications like the Aquaculture Stewardship Council (ASC). “We need to gear up for these requirements,” he stated, emphasizing that previous certifications suitable for the U.S. market may not suffice for European standards.

The importance of evolving manufacturing standards cannot be overstated. Avinash Chandni, Partner at Deloitte India, remarked that the elimination of tariffs should ease the path for exporters but underscored the need to address non-tariff barriers—including stringent food safety audits and testing standards. These hurdles will require exporters to adapt swiftly to ensure compliance and maintain their competitive edge.

Job Creation and Economic Uplift

Beyond the immediate effects on export volumes, the FTA is likely to have ripple effects throughout the domestic labor market. Gulati indicates that an increase in export-driven demand will lead to higher job creation in processing and logistics. Given that the marine and seafood sector is labor-intensive—supporting an estimated 20-30 million livelihoods—the long-term benefits could be transformative.

States like Andhra Pradesh, which is responsible for about 60% of India’s shrimp exports, along with Gujarat, Tamil Nadu, Kerala, and Odisha, are likely to be at the forefront of this uplift. As premium markets like the EU typically offer better prices than commodity markets, this shift could positively impact income levels for skilled workers, particularly in processing facilities.

Embracing Technology and Sustainability

The FTA paves the way for not just tariff reductions but also offers substantial opportunities for technology transfer and sustainability practices. With better access to European inputs and ingredients—like specialized packaging and sustainable feed additives—Indian processors stand to enhance their product offerings.

Gulati underscores the potential for Indian businesses to create value-added products such as ready-to-cook and seasoned seafood. With enhanced processing capabilities and traceability measures becoming increasingly important, Indian firms could tap into premium markets eager for high-quality offerings.

Conclusion: A Glimpse into the Future

While the FTA heralds a new chapter for the Indian marine and seafood industry, stakeholders are acutely aware that the journey ahead will require vigilance and adaptability. As the industry prepares for this monumental change, the focus will undoubtedly be on meeting stringent EU standards while also expanding market share and boosting local economies.

This pivotal moment in India-EU relations not only sets the stage for increased exports but also symbolizes a broader vision for collaboration that could redefine global trade dynamics. With the right strategies in place, the marine and seafood sector is poised for an exciting transformation.