India Strengthens Jute Import Regulations from Bangladesh: What You Need to Know Amid Rising Subsidy Concerns and Mill Closures

India recently decided to restrict the import of jute and similar products from Bangladesh. This move comes as a response to the influx of low-priced, subsidized imports that have hurt Indian farmers and led to job losses in jute mills. These sanctions will apply at all land and seaports in India, except for Nhava Sheva.

The aim is to promote local industries and safeguard the livelihoods of farmers reliant on the domestic jute sector. The government is also ensuring that imports don’t bypass these restrictions by coming through third countries.

Under the South Asia Free Trade Agreement (SAFTA), jute from Bangladesh enters India duty-free. However, this access has been abused, impacting India’s economic interests. The Indian jute industry has struggled for years due to cheaply subsidized imports from Bangladesh.

Experts highlight that evidence shows Bangladeshi jute exports benefit from government subsidies. To address this, India’s Directorate General of Anti-Dumping and Allied Duties (DGAD) investigated and imposed an Anti-Dumping Duty (ADD) on these goods. Yet, despite these efforts, imports have continued to rise, with traders finding ways to bypass duties through technical loopholes.

Imports dropped slightly from $138 million in FY 2016-17 to $117 million in FY 2021-22, but surged again to around $144 million in FY 2023-24. This surge has pushed jute prices below the government-set minimum price, causing financial strain on six jute mills, which owe significant dues.

In addition, the cheaper finished jute products from Bangladesh have led to lower production levels in Indian mills. Although Bangladesh has made small adjustments, it still incentivizes exports, especially of processed jute products.

The jute sector in India, particularly in West Bengal, plays a crucial role in supporting rural livelihoods. West Bengal alone produces 78% of the country’s jute. The industry employs over 400,000 workers in mills and related sectors, benefiting many farming families. Notably, around 90% of India’s jute is consumed domestically, mostly purchased by the government.

In conclusion, the restrictions aim to protect Indian farmers and revitalize the jute industry, which has faced severe challenges due to unfair competition. The future of the jute sector depends on how effectively these measures can level the playing field and ensure fair prices for farmers.



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