Compliance, competitiveness and market access : a study on Indian seafood industry

This study attempts to estimate the effects of the sanitary and phytosanitary (SPS) measures in terms of trade elasticity of regulations and competitiveness of exports. In spite of the gener-alized acknowledgment of growing liberalization of trade between countries, there are still numerous obstacles to trade, more of the non-tariff type. This study aims to contribute to the literature on quantifying the eco-nomic impact of health and environmental regulations expressed in the form of SPS measures on international trade in agro-food products, by taking Indian seafood exports as a case study. The gravity analysis, complemented with the constant market share (CMS) model, helped to obtain an insight into the overall dynamics of the export markets, trade flows and competitiveness of fish and fishery products (aggregate level), shrimps and cephalopods. For the regulatory variable, the maxi-mum residue limit (MRL) on cadmium in the model is used as an independent variable. A detailed study on the micro level dynamics of Kerala seafood export sector has been carried out, particularly to understand the industry level changes experienced during the stringent food safety regime. The results indicate that regulations on cadmium appear to be moderately trade restrictive. At the same time, results are divergent at the disaggregate level, which is significant from the point of view of trade policy. The most important aspect of the existing chain in Kerala’s seafood sector is the gradual disappearance of the independent preprocessing sector which has been an important stakeholder of the seafood value chain in Kerala. The preprocessing node of the value chain is getting integrated to the processing sector causing a major restructuring of the existing value chain. Keywords: Competitiveness, Trade models, Seafood Industry, Value Chain JEL Classification: F14, F18, L15, Q17, Q18