Saturday, 17 December 2022 | Shaji Baby John
GUEST COLUMN
Shaji Baby John
The conversation with a Japanese friend over lunch the other day came as an eye-opener for me. As we were savouring delectable fusion seafood dishes at RCP in Kochi Ms Rinsan kept on repeating, “Now is the time for India”. As a person with an extensive distribution network in China’s seafood sector, her refrain on India was different from the gloomy outlook in many conversations linked to the seafood sector nowadays. The gloomy scenario, of course, is dominated by the familiar theme of a supply glut from Ecuador, a slowdown in the US economy, the Ukraine war and energy crisis in Europe and the Covid-19 related logistical issues in China. Her repeated emphasis on ‘now is the time for India’ was a refreshing change and in tune with the strategic shift I have been advocating for long.
The Japanese use the word ‘chi-chi’ for crisis as well as opportunity. India must deliberate on the art of converting a crisis into an opportunity in connection with the ongoing turmoil in the global seafood sector. In my last column, I argued for developing a stable and vibrant domestic market for high-quality seafood to insulate the Indian seafood sector from the vagaries of the global market. Recession fears, the Ukraine war fallout and supply chain disruptions combined to create a glut in the global seafood market leading to the current situation. Along with a vibrant domestic market, I would emphasise, the need for developing long-term partnerships with countries looking for stable investment and food security opportunities. Japan and the Middle East and North Africa better known as the MENA region are the two names that come to mind immediately.
Japan, one of the most vibrant seafood markets in the world, has also invested in and developed the seafood sector in the world. China, Thailand, Indonesia, Vietnam and Bangladesh, etc gained momentum in seafood processing by harnessing Japanese technology and investments. Japanese have a very deep and stable relationship with India but we have not been successful in attracting their investments into the seafood sector to the extent that could have been achieved for mutual benefit.
Along with a very high seafood-consuming culture, Japan is also the leader in high-end technology that could be successfully harnessed by the Indian seafood sector. High-end Japanese technology, especially in areas such as Artificial Intelligence (AI) and the Internet of Things (IoT) could be used for developing next-generation sustainable and eco-friendly aquaculture in India. India’s capacity for production could be leveraged with the advanced technology base of Japan. We have successfully demonstrated such possibilities by conducting proof of concepts for precision aquaculture using AI, and IoT along with NEC Corporation Japan. Along with technology Japan is also awash in surplus capital and looking for safe and profitable investment destinations.
As one of the fastest-growing big economies in the world, India is one of the big countries on the investment radar of Japanese investors. The Japanese automobile makers, the pioneers of realising the market potential in India, have helped in a big way to change the face of the Indian automobile market. The time has come for Indian entrepreneurs in the seafood sector to draw lessons from the automobile sector and take proactive steps to attract Japanese capital with the appropriate technology partnerships to create a win-win situation. The importance of developing long-term partnerships between entrepreneurs in the Indian seafood sector and their counterparts in Japan assumes urgency in the background of Japan looking for realignment of its capital deployment following the growing uneasiness with China. The Indo-Pacific Economic Framework mooted by US President Joe Biden also opens up an opportunity to enhance relationships amongst the QUAD members beyond the defence matters.
Japan is no stranger to the Indian seafood sector as a technology supplier with experience. The time has come to further consolidate such relationships into long-term partnerships that would help in value addition, stable markets, and innovative solutions using AI and IoT. Let me make a brief digression to football for a minute before connecting with the catch of the day in seafood. The ongoing FIFA World Cup in Qatar as one of the most successfully conducted global events is an exhibition of the potential of the regional powers and emerging markets. The many upsets in the state-of-the-art stadiums in Qatar provide ample proof of this transition. The Moroccan team breezing into the semi-finals and their never-day die attitude in the match against France is emblematic of the shift taking place all around us.
The power shift in global economic equations, the weakening of the north-south bipolarity and the emergence of India as a strong global player flashed through my mind as Rinsan kept on talking about the “time for India” theme. It is the right time for India to leverage its age-old cultural ties with the Middle East and North Africa as the entire region is now called (MENA) in the parlance of global economic activity.
The MENA region as we know is one of the richest in terms of consumer spending and the fastest-developing area in the world. Apart from the economic development, the region is also witnessing dramatic changes in political and diplomatic realignments bringing an end to decades-old differences, disputes, and conflicts. The changes, inconceivable even a few years back, are expected to provide further impetus to the economic growth in the region in the coming days. Indian entrepreneurs in general and those in the seafood sector in particular should be ready with proactive measures to grab the emerging opportunities in the region. We should leverage the excellent diplomatic relationships India is having with major players in the region to advance business opportunities.
Currently, the Middle East region occupies the sixth place with just over 48,000 tonnes of seafood exports from India earning $ 251 million. The Middle East seafood market estimated at $ 21.28 billion in 2022 is projected to reach $ 24.09 billion in 2028. Shrimp has been identified as the fastest-growing seafood in the Middle East region with a compounded annual growth rate of over 3.01 per cent in the next five years, according to industry estimates.
The importance of developing long-term partnerships with Japan and the Middle East will go a long way in attracting investments to the Indian seafood industry. The process will help in balancing the overwhelming dependence of our exporters on the US market as the first advantage. The Indian seafood industry exports over 25 per cent of its volume to the US market. In FY 20-21, the US accounted for 29,948 tonnes valued at 2,451 million USD. China with 218,343 tonnes and 939 million USD accounted for the second position and South East Asia and European Union took the third and fourth positions. The Indian exporters needed to explore newer areas to realise greater value for their products as well as to safeguard themselves from the boom and bust syndrome associated with commodity cycles.
The West Coast in India comprising the states of Gujarat, Maharashtra, Goa, Karnataka and Kerala has vast potential for developing the next generation aquaculture based on ecologically sustainable methods. The area remains largely untapped. The region provides a good opportunity for the Japanese to look for newer avenues of capital investment and technology deployment. The synergy between Japanese technology and capital infusion would create the right ambience for the region to emerge as a stable supplier of high-quality seafood. The economic and cultural linkages of the West Coast with the MENA region could be leveraged for developing long-term partnerships in the seafood sector.
Developing greater access to regions like the Middle East will help Indian exporters to develop shorter and more cost-effective supply chain logistics compared with the US market. We have seen Ecuador taking advantage of a shorter supply chain while penetrating the US market in a big way. A focused approach on Japan and the Middle East would be of immense importance to the Indian seafood exporters, processors, and farmers in expanding the horizons of the potential of the seafood sector in the country. The arrival of the Indian fan in the arena of world football is one of the abiding images of the Qatar World Cup. The free-flowing Indian fans with a multitude of jerseys and flags represent yet another symbol of the ascent of India. This is a moment entrepreneurs can’t afford to miss.
(The author is the chairman of Kings Infra Ventures Limited who also writes on the blue economy and sustainable food production system. Views expressed are personal)
