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After cheaper jute products from Bangladesh flooding the domestic market, the Indian Jute Mills Association (IJMA) is set to file an anti-dumping case in the first quarter of the 2015-16 against subsidised exports.
“The association has been working on an anti-dumping case which should be filed with the Ministry concerned within the next quarter. A countervailing duty has to be either an anti-subsidy or anti-dumping duty, both will be pursued simultaneously,” said Raghavendra Gupta, Chairman, IJMA.
The Bangladesh government offers a 10 per cent cash subsidy on jute goods, such as bags and Hessian cloth, and a 7.5 per cent subsidy on jute yarn. The government also provides 40 per cent and 20 per cent of funding required by mills and exporters, respectively.
With import duty being nil under the SAARC treaty, as per industry estimates, nearly two lakh tonnes of jute finished goods flow into India from Bangladesh every year on the back of the “duty anomaly”.
The case will be filed with the Designated Authority heading the Directorate General of Anti-dumping and Allied Duties (DGAD), a body under the Commerce Ministry, which will investigate and recommend anti-dumping measures, if any, to the Centre.
Exporters hurt
India accounts for 70 per cent of the world’s estimated production of jute goods, with the majority being used for packaging domestically. Although a net exporter, India’s exporters have been hit with no exports to Syria and Thailand, a combined market of 70,000 tonnes, over the last two-three years due to political turmoil.
On average, Bangladeshi jute products are estimated to be 10 per cent cheaper and imports surged by 35 per cent between April and December 2014. “Indian mills are working at almost 25 per cent below their production capacity due to stifled demand,” added Gupta.
According to data from the Textiles Ministry, exports of jute goods (Hessian, sacking, carpet backing cloth etc.) between April and December 2014 are estimated at 88,600 tonnes. For the 2013-14 fiscal (April-March), India exported 216,000 tonnes of jute products.
“The volume of Indian exports is $300 million annually, which accounts for 15 per cent of production. The subsidised export policy followed by Bangladesh, our main competitor, makes it difficult for Indian manufacturers to compete since it’s difficult to match their price,” he said.
Gupta also expressed hope that domestic orders, particularly by the industry’s biggest buyer - the Food Ministry - which recorded a 35 per cent decline last year, would pick up in 2015-16 with sustained demand.
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