Jute Exports Stall as India Imposes Antidumping Duty
The number of trucks carrying jute and jute goods into India through the Benapole land port sharply declined after New Delhi imposed a high antidumping duty on the imports of the goods from Bangladesh.
India on January 5 slapped the antidumping duty on imports of jute and jute goods from Bangladesh and Nepal to “protect the domestic industry”. For Bangladesh, the duty ranges between $19 and $352 per tonne.
Only 10 trucks of jute goods have been exported through the port in the last five days while about 150 trucks used to enter India a day, prior to the imposition of duty, according to Shamsul Haque, assistant revenue officer at the customs cargo section of the port.
Thirty-one trucks carrying jute products were stranded yesterday at Bangladesh's largest land port, a gateway for the country to export most of the jute and jute goods to India.
The duty, which has been imposed for five years, will affect Bangladeshi products such as jute yarn, hessian fabric, and jute sacking bags.
Jute is the third largest export earning sector of Bangladesh, after garment and leather.
In 2015-16, Bangladesh exported jute and jute goods worth $919.58 million, up 5.88 percent from a year ago. Bangladesh ships 20 percent of its jute and jute goods to India, which is equivalent to 8 percent of the neighbouring country's entire market.
Many jute mills in Bangladesh, which rely on India for exports, may face closure because of the high duty, experts said.
Moon International Jute Mills, Probal Shipping Lines and at least four other firms in Khulna have exported jute goods as per the letters of credit opened earlier.
Touhidur Rahman of Probal Shipping Lines said his firm would have to count huge losses due to the new duty. The duty has made it impossible to compete in the Indian market.
The antidumping duty could result in adverse multiplier impacts on Bangladesh's local growers, producers, exporters and spur further trade imbalance with India, Dhaka Chamber of Commerce and Industry said in a statement on Saturday.
Three years ago, the Indian Jute Mills Association had accused Bangladeshi exporters—for the first time in 40 years—of selling jute products at prices lower than those in India's domestic market.
In October 2015, the Directorate General of Anti-Dumping and Allied Duties (DGAD) of India started its investigation into the matter.
As part of the investigation, a team of the antidumping authority visited some factories in Bangladesh and collected data, including the export prices of the shipped products to India and the sales prices in the domestic market.
Officials of the Tariff Commission of Bangladesh attended several hearings in India before the conclusion of the investigation.
Usually, the antidumping duty on a product is the same amount by which it undercuts the domestically manufactured product.
In its final order issued in October last year, the DGAD had come to the conclusion that there is dumping of goods and the imports were "undercutting and suppressing the prices of the domestic industry".
It said Indian jute producers are failing to compete with the imports, as Bangladeshi jute growers get 10 percent cash incentives.
But the DCCI said there is no clear finding of injury caused by Bangladesh's export price and volume to Indian local finished products.
The insignificant percentage of Bangladesh's share in the Indian market cannot influence their local jute market in a big way, according to the chamber.
India is the second biggest market for Bangladeshi jute and jute products, said Mafizur Rahman, president of Benapole Port Customs Clearing and Forwarding Agents Association.