India Enacts Second Stimulus Package
India’s seafood industry had been in a financial crunch prior to the onset of the global economic crisis. The country had felt the crunch from fluctuating oil prices, a rapidly accelerating rupee value and declining black tiger shrimp (P. monodon) prices.
On Dec. 6, India announced the country’s first stimulus plan, when the Reserve Bank of India cut the interest rate by 1 percent to 6.5 percent and approved a $4 billion additional expenditure. Last Friday, as advised, the interest rate was lowered to 5.5 percent. Following the adjustment, the Indian government announced a second stimulus plan, involving an additional $4.1 billion in expenditures as well as other measures to resuscitate exports.
A 2 percent reduction on packing credit interest, along with an extension of credit to 270 extra days on post-shipment and 180 on pre-shipment credits, managed to ease pressure on the seafood industry.
Anwar Hashim, president of Seafood Exporters Association of India, forecasted seafood exports will weaken 25 to 30 percent by volume for the current fiscal year ending March 31 due to a significant drop in demand from major markets, including the United States, Japan and the European Union.
Marine Products Export Development Authority (MPEDA) Chairman Mohan Kumar called this fiscal year ”the worst period for Indian seafood industry.”
The government has reinstated a tax refund in export-related industries that had been halted in November after the rupee was strengthened. Yesterday, the government released $16.5 million to reimburse exporters in the form of duty drawbacks and central sales tax refund.