Coping with the Standards Regime: Analyzing Export Competitiveness of Indian Seafood Industry

Jayasekhar Somasekharan,Harilal K N,Parameswaran M

doi:10.5539/sar.v2n1p98

Abstract

<p>In this research paper a Constant Market Share (CMS) approach was employed to learn export performance dynamics of Indian seafood (shrimps and cephalopods) in the major export destinations (EU, USA and select Asian countries), which accounts for a sizeable market for Indian seafood. The Constant Market Share model was used to disintegrate the growth in exports of seafood into market size effect, market composition effect and competitiveness effect. The analysis was performed for the seafood exports for a span of 12 years from the year 1996 to the year 2007, the period during which India had to face severe challenges from evolving food safety regulations in the EU and USA. The analysis was extended to account for the competitiveness at dis-aggregated commodity level. In the present study we observed enhanced competitiveness in the case of cephalopods while shrimp exports were less competitive. To a certain extent it shows that trade facilitating as well as trade restricting effects can coexist as an impact of strict food safety regulations.</p>

Highlights

Multitude of studies put forth the argument that stricter food safety standards in the developed countries are detrimental to the exports from developing nations in terms of market access and export competitiveness (Anders & Caswell, 2009; Henson, 2007)
It is evident from the analysis that during the food safety regime competitiveness of export of shrimp, which is an important fishery export item of India in terms of export value, has declined and the competitiveness of export of cephalopods, which is another high value seafood export item from India, has moved up
We observed that in the context of evolving food safety regime the seafood export dynamics was dissimilar at disintegrated commodity levels

Summary

Introduction

Multitude of studies put forth the argument that stricter food safety standards in the developed countries are detrimental to the exports from developing nations in terms of market access and export competitiveness (Anders & Caswell, 2009; Henson, 2007). An entirely new regime of food safety standards on India’s fishery exports were enforced and made mandatory by the European Union from 1997 onwards This has eventually directed a provisional prohibition on seafood exports from the country and succeeded a catastrophe in the fishery export sector when the necessary regulations were tough to comply within a short span of time. It is crucial to delineate and highlight the key factors which affect the trade competitiveness More over, such an attempt would certainly hold important stake in policy decisions. In this background, an attempt is made to analyze the impact of India’s seafood export performance from 1996 to 2007, which is considered as the regime of food safety regulations and resultant evolution of coping up strategies. The paper employs a Constant Market Share (CMS) approach to study India’s export performance of seafood (shrimp and cephalopod) in the markets of the EU, USA and select Asian countries

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Conclusion