Hyderabad: After a brief lull, the Indian poultry sector has again slipped into the fear of American chicken legs, with US President Donald Trump pressing India to slash the import duty on the meat item to 30 percent from 100 percent.
If the Narendra Modi-led NDA government yields to the pressure, then it will create another crisis for the Indian poultry sector as US chicken legs will be available in the country at Rs 200 per kilogram, said industry associations. “It’ll be a major jolt to poultry farmers and 50 lakh people dependent on the sector,” said the association (can we name the association).
Poultry farmers have a reason to worry over the import of chicken legs from the US. Recently, the Centre modified the norms concerning the health certification requirement for imported poultry items from the US, suggesting that American chicken legs are all set to enter the Indian market.
Earlier, the World Trade Organization (WTO) had discarded India’s defence on curbs on import of American poultry products over the fear of avian influenza, saying it was inconsistent with the National Treatment Principle under the General Agreements on Tariffs and Trade (GATT).
“Yes, the cheaper imports of chicken legs from the US will hit the domestic poultry sector severely,” said the owner of a poultry farm on the outskirts of Hyderabad. “Indians are very fond of chicken legs, while Americans prefer chicken breast.”
The sluggish demand for chicken legs made them cheaper in the US. Also, India has banned genetically modified (GM) soy and corn in poultry feed, which is in much practice in the US, said the association (name?).
The US exports chicken legs to China and other Asian countries where the demand is more. However, the ongoing trade war between the US and China has affected the export of chicken legs from the world’s largest economy.
With its inventory of chicken legs piling up, the US has turned to explore the huge Indian market, prompting Donald Trump to pressure India to slash import duty on chicken legs to 30 per cent from 100 per cent. India has to take a call on this issue by January 28, 2021.
In the US, a kilo of chicken costs about $7, while legs are sold at mere 50 cents. Indians mostly prefer fresh chicken and don’t like frozen meat. “How far the cheaper imports will attract Indians is a big question,” said a restaurant owner.
However, bars, small hotels and roadside dhabas may prefer the cheaper chicken legs from the US, said a representative from the AP Poultry Federation.
Several poultry associations from different states are submitting memorandums to the Centre requesting it to not allow the entry American chicken legs into the Indian market. The Telangana Poultry Breeders Association has suggested to the Centre to double the import duty on chicken legs and keep the 30 per cent import duty on other chicken imports.
If India reduces the import duty, the US chicken legs will be available at Rs200 per kilogram. The cheaper chicken legs from the US will erode not only the margins but also shrink the top line, said a local poultry association.