Key Points
New Delhi: India is considering tightening its duties on jute and jute products to check imports of cheap, subsidized goods from Bangladesh that are undermining local manufacturers, a senior official said..
. Cheap imports, combined with high raw material costs, act as a disincentive and are blamed for a shortfall in domestic production of jute products..
India started investigating imports of Bangladeshi jute goods towards the end of last year, to look at imposing countervailing duty (CVD), which came up in a petition to the government by the Indian Jute Mills Association..
India is one of the largest importers of jute and its products from Bangladesh, a country that provides a cash subsidy of 12% as export incentive on Hessian sacks and carpet backing clothing (CBC); 7% incentive on jute fibres including yarn and twine; and 20% subsidy on jute diversified products including food grade bags and clothes. . India's Jute industry is facing a looming threat of being labelled a sunset industry..
According to the official cited above, one of the major reasons behind the decreasing jute demand is the violation of the JPMA Act by the sugar industry that provides for packaging of all food grains and 20% of sugar production compulsorily in jute bags..
