Skip to main content

India's anti-dumping duty on jute import 'adversely impacts' trade with Bangladesh

By Samara Ashrat* 

Will the proposed Comprehensive Economic Partnership Agreement between India of Bangladesh be a comprehensive economic framework and an instrument to optimize the advantages of their strategic geographical landscape? 
Bangladesh is crafting strategies to start negotiations with India on the long-awaited CEPA. Indian high commissioner to Bangladesh Pranay Verma, too, recently said CEPA could be a game-changer for both the countries in terms of trade. 
However, concerns remain.
The imposition of anti-dumping duties on jute goods has had a negative impact on Bangladesh’s exports to India, as the country’s export items were already limited. Such a duty has a negative impact on our exports of jute goods as we exported more than 1.45 lakh tonnes of jute goods to the Indian market earlier. After the imposition of anti-dumping duty, the exports of the items have fallen to about 35,000 tonnes.
India is of the view that a dual policy has been implemented in the import of jute and jute products from Bangladesh for the benefit of the Indian jute mills. On the other hand, Bangladesh  demanded withdrawal of this dual policy or the imposition of additional duty tax on the import of raw jute from Bangladesh. 
According to the notification of the Indian Finance Ministry, signed on December 30, the anti-dumping duty will be effective for the next five years. The duty is required to be paid in Indian currency. The new announcement imposes different rates of anti-dumping duty on jute products exported from Bangladesh till 2027. 
According to the sources in the Ministry of Finance of India, under to the new policy, the duty of 6 dollars 3 cents to 351 dollars 72 cents per ton will be applied on the jute products of Bangladesh and Nepal.
The private jute mill owners of Bangladesh have expressed their disappointment at this decision of India. They say, as a result of this new decision, there will be another crisis in the export of jute products from Bangladesh to India. 
This may lead to closure of some more jute mills. India's jute exports will face a major threat due to the extension of the new anti-dumping duty. For the last five years, exports to India have been falling due to the imposition of tariffs. Now if we extend the term again we will lose the market completely.
Nearly 60 percent of the jute products exported from Bangladesh go to India. Since the imposition of anti-dumping duties in 2017, exports have started to decline. Many private jute mills were closed due to this.
Additionally, the decision may also affect the livelihoods of jute farmers, as well as workers in the jute manufacturing industry in Bangladesh, which relies heavily on the Indian market for its exports.
It may be ideal if the issue can be resolved through diplomatic or bilateral means before taking the matter to the WTO
It is also worth noting that this decision by India could also prompt other countries to impose similar measures, further exacerbating the negative impacts on the Bangladeshi jute industry. Also, despite India and Bangladesh considering each other as important and closest neighbours, the trade gap between the two countries will widening significantly.
In FY 2021-22, Bangladesh imported commodities worth US$14.58 billion from India, while its exports to that country were valued at only US$1.8 billion. In the fiscal year 2020-21, the figures were US$9.69 billion (import) and US$1.09 billion (export) respectively.

What remedial measures can be undertaken?

As a member of the World Trade Organization (WTO), any country can challenge the imposition of anti-dumping measures through the Dispute Settlement Understanding (DSU) mechanism. This allows for the raising of all issues related to compliance with the 
Anti-Dumping Agreement’s requirements before a panel established under the DSU. Considering the close relationship between Bangladesh and India, it may be ideal if the issues can be resolved through diplomatic or bilateral means before taking the matter to the WTO.
The commerce ministry was planning to impose restrictions on raw jute exports to India last year after India did not withdraw anti-dumping duties despite repeated requests. In this, an initiative was taken to determine the minimum export price for the export of raw jute. But that decision was not taken because of the high price of jute and the fear of loss to the local farmers.
The author
The Government of India has not taken any initiative even though the request has been made from the higher level to withdraw this duty. Only jute raw materials are exempted from this duty. Because the entrepreneurs of the jute sector of Bangladesh supply a part of the raw material required by the Indian mills. 
Due to this duty, the cost of exporting jute products in India has increased, the country's jute industry is losing Indian buyers due to the high cost of importing the product. As a result, the export of jute products from Bangladesh to India is decreasing. many mills are now closed due to lack of orders and limited production is going on in some places.
---
*PhD fellow, International Relations, University of Bucharest

Comments

TRENDING

'Wedding of the century': What does Mukesh Ambani want to prove by such extravaganza?

By NS Venkataraman*  Mukesh  Ambani,   a renowned Indian industrialist who is said to be the richest person in India and  one of the richest persons in the world,   has just now conducted the wedding celebration of  his son in Mumbai,   with unheard level of lavishness in India.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur* Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

'28% rise in sedition cases': Top global NGO alliance rates India's civil space 'repressed'

By Rajiv Shah Rating India's civic space as repressed , Civicus, a global civil society alliance, in its new report submitted to the UN Human Rights Committee (UNHRC) on the state of civic space in the country has said that the use of sedition law against the Modi government’s critics continues. "Under the government of Prime Minister Narendra Modi, sedition cases have increased by 28 per cent with over 500 cases against more than 7,000 people", it says.

'Modi govt's assault on dissent': Foreign funds of top finance NGO blocked

By Rajiv Shah  In a surprise move, the Ministry of Home Affairs, Government of India, has cancelled the foreign funding license of the well-known advocacy group, Centre for Financial Accountability (CFA), known for critically examining India's finance and banking sectors from human rights and environmental angle.

How US is using Tibetans to provoke conflict with China 'ignoring' India

By Lobsang Tenzin*  On July 12, US President Joe Biden signed the Resolve Tibet Act, and Tibetans cheered for it, believing that the law promotes a resolution of the dispute between Tibet and China. Is this true? First, let's look at the issue of the ownership of Tibet. 

How embracing diversity enriched my life, brought profound sense of joy

By Mike Ghouse*  If you can shed the bias towards others, you'll love the connections with every human that God or his systems have created. This gives a sense of freedom and brings meaning and joy to life. Embracing and respecting how people dress, eat, and practice their beliefs becomes an enriching experience.

Post-poll mob lynching spree, bulldozer justice: NAPM seeks united resistance

Counterview Desk  Condemning what it calls "the horrific spree of mob lynchings across the country after the Lok Sabha election results", India's premier civil society network, National Alliance of People’s Movements (NAPM), has called for "united resistance" against "hateful communal politics, mob lynching of religious minorities and caste-based oppression".

Maharashtra govt's proposed bill may be used against 'dissenting' journalists, writers, filmmakers, artists

Counterview Desk  The People’s Union for Civil Liberties (PUCL), Maharashtra, strongly objecting to what it calls “repressive and unconstitutional” Maharashtra Special Public Security Bill 2024, has demanded the proposed law be scrapped in its entirety. In its Statement of Objects and Reasons for the Bill, PUCL noted,  the broad and non-descript label of ‘urban naxal’ has been used, which is actually a “common slur used for any citizen who expresses their opposition to state policy or is not aligned with right-wing majoritarian views."