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Kochi, Nov. 7 The Centre has approved freight assistance for the import of specified raw marine products and exports to spur growth in the domestic seafood industry. The Expenditure Finance Committee of the Government of India approved the scheme with an outlay of Rs 95 crore, the Seafood Exporters Association of India has said.

An appraisal by the committee revealed that only 20 per cent of the processing capacity of the domestic seafood industry is being utilised due to scarcity of raw materials. It was found that the catch has not been increasing in the recent past and that aquaculture was not keeping pace with the increasing requirements of the industry. Hence, there was an imperative need to enhance import of raw material to ensure that the processing plants are better utilised, which in turn was expected to generate more jobs and more foreign exchange.

Despite the low cost of labour and high existent processing capacity, the bid to transform the country into a seafood processing hub was thwarted by the freight disadvantages faced by India vis-a-vis other competing countries. The reduction in freight component is expected to increase the quantum of raw material available and ensure better utilisation of capacity, much of which continues to remain idle.

The committee decided to provide assistance at the rate of 50 per cent of the freight differential a container for the first three years and 25 per cent for the fourth year to units for importing raw material for processing and export of value-added products. The assistance would be extended only to units which achieve a minimum value addition of 25 per cent. It was decided to provide assistance for export of specified value-added products at the rate of Rs 5/kg to the US, Rs 4/kg to the EU and Rs 3/kg to Japan for the first two years. The committee pointed out that the subsidy was being extended due to the low volume of raw material imports and hence the relative higher costs.

However, the exporters should see the assistance only as an interim measure which would be phased out once the container traffic builds up and freight rates decline. The committee was hopeful that the freight rates would start declining from the fourth year onwards and reach internationally competitive rates.

The scheme was limited to processors with definite value addition and importers taking up job work would not be covered under the scheme.

More Stories on : Aquaculture | Exports & Imports

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