The Rs 8,000-crore jute industry will seek removal of the four per cent special additional duty (SAD) on import of raw jute from Bangladesh in this Budget.
According to Raghav Gupta, Deputy Chairman of Indian Jute Mills’ Association, removal of SAD will help create a level playing field between India and Bangladesh in terms of exports of the golden fibre.
It will also help bring down prices of raw jute in the domestic market.
Duty on raw jute imports was introduced last year. The move pushed up product costs rendering the local jute industry uncompetitive in export markets.
“We have written several letters to the Jute Commissioner and now we are also planning to represent our case to the Finance Ministry,” Gupta told Business Line.
Nearly 8-10 per cent of the country’s raw jute requirements (100-110 lakh bales) are met through imports (from Bangladesh).
Import of raw jute increased by nearly 75-80 per cent from 5-6 lakh bales in 2009-10 to 8-9 lakh bales in 2011-12.
“Bangladesh gives 10 per cent subsidy on exports. Removal of SAD will bring down costs and make Indian jute more competitive,” said Jute Commissioner, Subrata Gupta.
Impact on raw jute prices
Raw jute prices, which were ruling at around Rs 2,800 a quintal in end January, has now firmed up to Rs 3,100 a quintal as stockists have been holding on to their stocks in anticipation of better prices, a senior official in a jute mill said.
The price differential between raw jute produced in the country and that imported is close to Rs 200-300 a quintal.
“Removal of import duty will bring down prices, thereby pushing up imports as well as in domestic markets,” the official said.