Bangladesh jute millers want India to lift anti-dumping duties

When Bangladesh is waiting for India's response to a request for revoking anti-dumping duties on jute, Indian traders now want their government to continue those to protect their industry.

The Indian Jute Mills Association (IJMA) claimed that Bangladesh gives incentives to jute to boost its exports which is "a threat" to India's jute sector, according to a report of The Hindu newspaper.

Entrepreneurs in the Bangladeshi jute sector, however, feel Indian businesspeople by making such claims are actually pressuring their government so that it does not lift the protectionist tariff that has been in force since 2017.

As per rules, anti-dumping duty cannot be imposed on any product for a period of more than five years which has already expired.

Commerce Minister Tipu Munshi this April wrote a letter to his Indian counterpart seeking repeal of the anti-dumping duties.

Meanwhile, Md Hafizur Rahman, director general at the WTO Cell of the commerce ministry, on Sunday told The Business Standard that they were yet to receive a response to the letter written to the Indian commerce minister.

The Indian newspaper quoting a press statement issued by the IJMA on 5 May writes, "The jute industry would have been completely wiped off by now, had the Indian government not imposed anti-dumping duty." 

Entrepreneurs in the jute sector of Bangladesh, who are still exporting jute products to India paying the anti-dumping duties, claimed that the country's jute mills and jute-spinning mills have been badly affected by the Indian government's action as the neighbouring country is the major export destination of their products.

"Bangladesh's exports to India are gradually declining due to anti-dumping duty. There cannot be two types of policies for importing goods from a single country. We are suffering due to anti-dumping duty on finished goods but they are taking raw jute for their own mills. We have demanded the government to lift anti-dumping or increase taxes on jute imports," said Mridha Moniruzzaman Monir, vice-chairman of Bangladesh Jute Spinners Association and managing director of Golden Jute Industries Ltd.  

Jute yarn rolls are staked inside a Bangladesh Jute Mills in Narsingdi. It is one of the 25 state-run jute factories shut down by the government in July 2020 because of heavy losses and excessive production costs. Photo: TBS

India has implemented a self-contradictory policy in importing jute and jute goods from Bangladesh in the interest of their local jute mills, he added, demanding withdrawal of the "inconsistent policy." 

Refuting the claim of Indian millers, Moniruzzaman said, "Bangladesh alone is not providing export incentives. The Indian government also is doing the same, but we are not complaining about it."

Jute is among the products that are entitled to cash subsidies offered by the government to diversify exports. 

The Indian government in 2017 imposed anti-dumping duties ranging from $19 to $352 per tonne on jute products exported from Bangladesh.

Jute yarn / twine (multiple folded / cabled and single) hessian fabric, and jute sacking from Bangladesh and Nepal are subject to anti-dumping duties under a directive from the Commerce Department of the Ministry of Commerce and Industries, India.

The five-year term of this duty in the first phase ended last January. The imposition of anti-dumping duty in the second phase has been extended till next June.

The Bangladesh government was planning to impose restrictions on raw jute exports to India last year as India did not lift the anti-dumping duty despite repeated requests. As part of that, an initiative was taken to fix a minimum export price for raw jute exports.

But, the government did not execute the plan considering the high price of jute and fearing that local farmers might be affected, sources at the commerce ministry told TBS.

Despite requests from various levels of the Bangladesh government to withdraw the duties, the Indian authorities did not take any action in this regard, stakeholders said, adding that only raw jute has been kept outside the purview of this protectionist tariff, and, this is because Bangladeshi suppliers cater to a portion of the Indian jute millers' demand for this raw material of jute goods.

Jute yarn rolls are staked inside a Bangladesh Jute Mills in Narsingdi. It is one of the 25 state-run jute factories shut down by the government in July 2020 because of heavy losses and excessive production costs. Photo: TBS

According to industry insiders, the cost of exporting jute goods to India has increased because of anti-dumping duties, and because of an increase in import cost from Bangladesh, Indian buyers are moving away from Bangladesh.

As a result, Bangladesh's jute exports to India are declining, they pointed out, adding that many mills are now closed while others are continuing with limited production because of a lack of orders.

Mohmmad Shafiqul Islam, chairman of Bangladesh Jute Goods Exporters Association, however, told TBS, "Indian buyers imports jute goods from Bangladesh since the local jute mills in the country cannot fully meet the domestic demand. Besides, the government is not providing incentives only on exports to India. It is providing the facility for exports to all other countries. And, the Indian jute mills are not supposed to face any difficulties for this."

Israt Jahan Chowdhury, CEO of Tulica Eco Limited, told TBS, "As India gives incentives on its various products, Bangladesh also gives incentives to facilitate the industrial sector and boost exports."

Incentives are given to take the jute industry forward, and it is not associated with any specific country, she mentioned, adding these issues are brought to the fore just to make excuses to issue anti-dumping duty.