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The research pertains to the study of the effect of environmental measures on Indian exports and the same has been done through field studies and case analysis of the shrimp & prawn sector of India. The research is on an environmentally sensitive product which would attract regulations, particularly the food safety regulations from the importing countries. The issue which has been delved upon is, that how the environmental measures (which are food safety regulations in case of food sector) are impacting our exporters and also the export trade flow.
The researcher used mixed method research, and consciously blends the qualitative and the quantitative analysis to fulfill the research objectives and test the hypothesis. The food safety regulations under the focus were that of the main importing countries, i.e. the European Union, Japan, USA and China. A comparative, qualitative analysis of the same was carried out across the nine chosen dimensions. Empirical testing was done by using gravity model to check how it had impacted the world shrimp and prawn exports. The empirical exercise was carried out by applying ordinary least square technique on the panel gravity data using fixed effects.
Results show that the food safety regulations are indeed dampening our exports. The sector is exposed to different levels of strictness of the food safety regulations from the importing countries in terms of its standards and also the way the regulations are implemented. The compliance costs estimated, show that with complex food production chains, the compliance costs have to be incurred at each of the levels i.e. the hatchery level, farmer level and the exporter/ processor level.
The research suggests that though the brunt of the export rejections and subsequent losses are faced by the exporters, but genesis may lie in the prior stages of production and therefore the course corrections and the investments at the exporter/ processor level is not sufficient to deal with the issue and for enhancing exports of the sector compliance has to spread over all the stages. The basic need is to have an interface between the different stakeholders so that they can see and understand each other’s needs, requirements, reasons and limitations
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