The Union Budget 2026-27 has introduced a significant policy shift for India's marine sector, proposing duty-free status for fish caught by Indian vessels in the country's exclusive economic zone (EEZ) and on the high seas. This move aims to unlock the economic potential of marine resources beyond coastal waters, potentially transforming the deep-sea fishing industry.
Current Challenges in Deep-Sea Fishing Operations
Currently, India lacks a separate concessional duty framework that specifically recognizes fish caught in the EEZ as domestic produce. Fish caught by Indian vessels beyond territorial waters and brought to Indian ports has often been treated as imports, attracting customs duties and integrated goods and services tax (GST). This combined tax burden significantly raises operational costs and compliance requirements, creating a disincentive for deep-sea and EEZ fishing activities.
Budget Proposals to Transform Marine Fisheries
The Budget proposes two key measures to address these challenges. First, fish caught in the EEZ will become duty-free, reducing operational costs and formally recognizing the catch as Indian produce. Second, catch landing at foreign ports will be treated as export items, enabling direct access to global markets and potentially fetching higher prices for Indian fishermen.
These policy changes could provide a substantial boost to deep-sea fishing operations, facilitating the harvesting of high-value species such as tuna, marlin, and sailfish. Additionally, they are expected to help formalize offshore fishing operations that have traditionally operated in a regulatory gray area.
Economic Impact and Industry Response
India's exclusive economic zone spans approximately 2.3 million square kilometers of the Indian Ocean, representing a vast untapped resource. Pawan Kumar G, president of the Seafood Exporters' Association of India, noted that Indian fishing vessels are currently not adequately equipped for long-distance operations that require onboard freezing facilities.
"The announcement may attract investment in modern vessels," he stated. "Additionally, the value limit of duty-free imports of specified goods for use in seafood processing has been increased from 1% to 3% of the free-on-board value of seafood products exported during the previous financial year. This will help bring in more ingredients for high-end value addition such as marinated and breaded products."
Alignment with Global Maritime Standards
Kalyan Kolukuluri, a faculty member in economics at IIM Visakhapatnam, highlighted that many countries, including the United States and China, follow similar rules for deep-sea fishing. "India is aligning its customs regulations with global maritime standards," he explained, emphasizing that this move represents a strategic integration with international fishing practices.
Potential Benefits for the Marine Economy
The Budget proposals are expected to yield multiple benefits:
- Reduced operational costs for fishing vessels operating in the EEZ
- Formal recognition of EEZ-caught fish as domestic produce
- Enhanced export opportunities through foreign port landings
- Increased investment in modern fishing vessels and technology
- Development of value-added seafood products for domestic and international markets
By creating a more favorable regulatory environment, these measures could significantly enhance India's position in the global seafood market while promoting sustainable utilization of marine resources in the exclusive economic zone.
