First News
Volume:7, Number:29
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Business & Finance 1

Jute in Peril

| Monowar Hossain |

Indian anti-dumping duty imposed on jute products from Bangladesh is likely to force jute spinning to close down, leading to unemployment

Export to India, especially of jute goods, has never been smooth. The importing country creates hurdles in the trade transactions with the clear intention of protecting the interest of local manufacturers by imposing barriers, now non-tariff barriers. In fact, our export to India now depends on the mercy of its government.

This was the angry comment of a jute goods exporter in the wake of imposing anti-dumping duty by the Indian government on the export of jute products from Bangladesh. He said it is beyond all doubts that the Indian market is well insulated and its government is always prompt in taking any step to protect the interests of the local producers. But the Bangladesh government is not in a mood to reciprocate that move, he complained. Thus our market remains wide open to the foreign goods, while our exporters face restrictions in various forms. Raw jute and jute products are being exported to India for many years as major items from Bangladesh. Although the items are imported to meet their own need, it faces restrictions when the importing country finds that further import of the item would affect the local market. Indian government does it responding to the demand of the local manufacturers.

In the first week of January this year, the Indian government imposed anti-dumping duty on Bangladeshi jute products. By any measure, the rate of duty was very high, ranging from USD20 to USD352 on one tonne of jute yarn or sack or jute cloth. These products are used for making secondary jute goods. The duty would push up the price of jute yarn to a level that would greatly discourage the buyers to buy the item. An exporter said Bangladeshi jute yarn is of fine quality and this quality has caused animosity in a section of jute products manufacturers in India. The result of the imposition of anti-dumping duty was almost instant.Movement of trucks carrying jute goods has drastically fallen. About 250 trucks used to carry jute to Benapole port every day. After the imposition of the duty, the number of trucks came down to 22 or so.

The exporters fear that anti-dumping duty is not likely to be lifted soon. They will, however, appeal to the concerned Indian authority seeking review of the decision. The Indian authority may reconsider its decision if it wants to, but that would not happen anytime soon. In this situation, intervention of Bangladesh government would be necessary. The jute goods exporters have already approached the government in this regard. India has been a competitor of Bangladeshi jute and jute products since the independence of the country. It also imports jute and jute products from Bangladesh to meet its domestic needs. But insiders said, local manufacturers have never seen the import of jute goods from Bangladesh with grace. Now, India is the second largest market for Bangladeshi jute products. About 80 public and private jute mills export their products to India.

In the last fiscal year (2015-16), the earning from jute and jute products was more than USD900 million. The Jute Spinners' Association has expressed concerns that the anti-dumping measure of the Indian authority would lead to the closure of a number of jute spinning mills in Bangladesh, resulting in unemployment.

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