EU-India FTA: New pressure on Vietnamese tuna
EU and India's push to finalize a bilateral Free Trade Agreement (FTA) is predicted to create significant changes in competitive balance in EU market, especially for seafood product.
Accordingly, this FTA is expected to reduce EU import tariffs to 0% for many key Indian export product groups, including seafood products currently subject to tariffs of up to approximately 26%. At the same time, EU has also announced it will eliminate or reduce tariffs on a large scale across total bilateral trade to stimulate trade and diversify supply chains.
In tuna industry, key competitive advantage often lies in after-tax cost of frozen tuna loin, frozen steamed tuna loin – the raw material for processing and canning – and finished canned tuna products. These segments are particularly sensitive to tariff differences of just a few percent.
Vietnam Association of Seafood Processing and Export (VASEP) stated that Vietnam currently has a Free Trade Agreement with EU (EVFTA), in which tuna is a product group with a tariff reduction roadmap and preferential tariff quotas (TRQ). Specifically, canned tuna enjoys a duty-free quota of 11,500 tonnes/year, and some tuna loin/meat products have a tariff reduction roadmap to 0% over time.
However, EVFTA advantage is most strongly demonstrated when competitors still face relatively high Most Favored Nation (MFN) tariffs. When India has an FTA with the EU and many seafood products are subject to 0% tariffs, "preferential gap" between Vietnam and India in EU will narrow.
"Therefore, orders are more likely to shift to suppliers with better prices in the same segment. Pressure to lower prices on Vietnamese tuna products increases, especially for processing orders, tuna loin, canned tuna, etc. Preferential tariff advantage under the 11,500-ton canned tuna quota for Vietnam may decrease in relative value, as EU buyers have more options for similar or nearly similar preferential treatment from India", Vietnam Association of Seafood Processing and Export (VASEP) stated.
Pressure from compliance and supply chain restructuring
In tuna trade with EU, tariffs are only part of the competitive equation. The rest lies in compliance requirements, traceability and legal risks, especially regulations related to combating illegal, unreported and unregulated (IUU) fishing. In recent times, Vietnam has been working diligently with EU to lift the IUU "yellow card" imposed by European Commission. In context of increasingly fierce tariff competition due to India's 0% preferential tariff, any "risk discrepancy" in assessment of EU importers could lead them to restructure their supply sources. If two suppliers have similar tariff rates, EU buyers will prioritize the one with a cleaner compliance record and lower legal risks.
India has a significant advantage in raw materials and the ability to participate deeply in the tuna processing supply chain. When import tariffs on seafood into EU are reduced to 0%, this country can increase its competitiveness in product groups that Vietnam is boosting thanks to the EVFTA, such as frozen tuna loin, steamed frozen tuna loin – raw materials for canned goods, as well as some processed products.
This allows EU importers to “diversify” their supply sources in short term to optimize prices and reduce the risk of supply chain disruptions. As a result, existing suppliers, including Vietnam, may see their market share shrink if they do not adjust their strategies in time.
“If EU-India FTA is implemented on schedule, period of 2026-2027 will be the time when EU importers restructure their supply sources, and Vietnamese businesses will face many difficulties in maintaining their market share in this market bloc. Therefore, businesses need to build appropriate strategies now”, Vietnam Association of Seafood Processing and Export recommends.

Source: Vitic/ congthuong.vn