The US has said it will not impose countervailing duty on imports of frozen warm water shrimp from India and six other countries.
The US International Trade Commission (USITC) has said the US industry is “neither materially injured nor threatened with material injury” by reason of imports of frozen warm water shrimp from countries including India, China, Ecuador, Malaysia, and Vietnam.
As per the WTO Agreement on Subsidies and Countervailing Measures, a country can launch its own investigation and ultimately charge extra duty (countervailing duty) on subsidised imports which it finds are hurting domestic producers.
“As a result of the USITC's negative determinations, US department of commerce will not issue countervailing duty orders on imports of these products from India. The decision brings a great relief to Indian shrimp industry and its exports,” an official statement said on Monday.
According to an industry estimate, India's seafood exports including frozen shrimp stood at $3.5 billion in 2012-13. About a fifth of the exports were to the US.
The decision comes ahead of Prime Minister Manmohan Singh's scheduled visit to Washington later this week.
The USITC imposed a 5.85% countervailing duty on Indian shrimp exports last year in response to alleged price advantages enjoyed by Indian exporters because of government subsidies. The final decision of the USITC came in favour of India and six other countries and negate the US department of commerce's decision.
“Due to this, none of the seven countries including India need to pay duties for their shrimp exports to the US,” it said.
In December 2012, the Coalition of Gulf Shrimp Industries filed a petition claiming that subsidies provided by the Indian government to its shrimp industry gives an unfair advantage to the country's shrimp exports to the US, resulting in Indian exporters selling their products at lower prices.
It also said that if countervailing duty was imposed, it would have helped Thailand and Indonesia to monopolise the US shrimp market, and market access of Indian shrimp would have been affected.