Budget 2024 showcases ambitious blueprint for India’s Seafood Sector

Finance Minister Nirmala Sitharaman presented several initiatives aimed at boosting India’s seafood sector in Union Budget 2024-25. Despite various challenges in significant export markets, India’s seafood exports touched an all-time high in volume in FY 2023-24, shipping 17, 81,602 MT of seafood worth US$ 7.4 billion.

The overall budget of the Department of Fisheries for the financial year 2024-25 has been increased by 54% to Rs 2,616.44 crores. The reduction of Basic Customs Duty to 5% on broodstock and financial support for establishing Nucleus Breeding Centres for Shrimp Broodstock are expected to give the industry a renewed thrust.

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Union Finance Minister Nirmala Sitharaman unveiled the Union Budget 2024-25 in Parliament, earmarking Rs. 2,616.44 crores for the Department of Fisheries, a significant increase from Rs. 1,701.00 crore allocated in the previous fiscal year. This marks a 54% rise in the department’s overall budget compared to 2023-24.

Specifically, Rs. 2,352 crores has been allocated for the Pradhan Mantri Matsya Sampada Yojana (PMMSY) scheme for 2024-25, reflecting a 56% increase from the Rs. 1,500 crore allocated in 2023-24. Apart from the budget allotment, the Finance Minister introduced several initiatives to boost the country’s aquaculture sector.

One key measure is the reduction of basic customs duty to 5% on broodstock (used for breeding), polychaete worms, and shrimp and fish feed. Additionally, various inputs used in the manufacture of shrimp and fish feed will be exempt from customs duty. This move is expected to further enhance the industry, which exported seafood worth US$ 7.4 billion in the last financial year. Out of this, Vannamei shrimp exports were valued at US$ 3.6 billion. Raw material costs represent a substantial portion of expenses for feed manufacturers. Reducing import duties on these materials will enable companies to enhance their profit margins.

Another proposal is the financial support for establishing a network of Nucleus Breeding Centres for Shrimp Broodstock. The government also announced that financial aid for shrimp farming, processing, and export would be facilitated through NABARD. Given the thin margins in these businesses and the typical 2-3 month working capital cycle, this support could be crucial in aiding the industry’s growth and stability.

While announcing the budget, Ms Sitharaman stated, “I propose to reduce BCD (basic customs duty) on certain broodstock, polychaete worms, shrimp and fish feed to 5%. I also propose to exempt customs duty on various inputs for manufacture of shrimp and fish feed.”

The Finance Minister also announced that the government will introduce a National Cooperation Policy aimed at fostering the overall development of the country.

The Marine Products Export Development Authority (MPEDA) has applauded the recent announcements made in the Union Budget 2024-25. Mr D V Swamy IAS, Chairman of MPEDA, states, “The proposed measures will substantially lower production costs, elevate quality, and enhance the international competitiveness of Indian marine products.”

MPEDA supported these proposals, stating:

• The financial support for Shrimp Broodstock Centers is anticipated to drastically reduce India’s reliance on imported broodstock, potentially saving the industry up to ₹150 crores annually.
• The National Bank for Agriculture and Rural Development (NABARD) will play a crucial role in facilitating financing for shrimp farming, processing, and export. This intervention is designed to cover 80% of project costs for farmers, accompanied by an interest subvention of up to 3%.
• Various inputs used in the manufacture of shrimp and fish feed will now enjoy customs duty exemptions. Various feed inputs viz. mineral and vitamin pre-mixes, krill meal, fish lipid oil, crude fish oil, algal prime, algal oil were fully exempted from any import duty.

Exports at glance

Despite various challenges in significant export markets, India’s seafood exports touched an all-time high in volume in FY 2023-24. India shipped 17, 81,602 MT of seafood worth Rs 60,523.89 crore (US$ 7.38 billion) during 2023-24 witnessing a surge of 2.67% in quantity from exports of 17, 35,286 MT of seafood worth Rs 63,969.14 crore in 2022-23.

Frozen shrimp retained its position as the top item in the seafood export basket, earning Rs 40,013.54 crore (US$ 4881.27 million), accounting for a share of 40.19% in quantity and 66.12% of the total dollar earnings. During 2023-24, exports of frozen shrimp were recorded at 7, 16,004 MT. The USA, the largest market imported 2, 97,571 MT of frozen shrimp, followed by China (1, 48,483 MT), the European Union (89,697 MT), Southeast Asia (52,254 MT), Japan (35,906 MT) and the Middle East (28,571 MT).

Source: pib.gov.in

By reducing customs duties and providing financial support, the government aims to lower production costs, improve profit margins, and enhance the international competitiveness of Indian marine products. These measures are expected to foster industry growth, elevate export quality, and position India as a global leader in seafood exports.