Jute industry concerned over rising imports

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Kohinoor Mandal

Kolkata, Feb. 16

Imports of jute sackings, used mostly for packaging activities, have increased to around one lakh tonnes in the current financial year against an average 10,000 tonnes in the earlier years.

This has created serious concern in the domestic jute industry, which is apprehending that these products are being used in packaging foodgrain and sugar after adding an illegal tag that the product is manufactured by an Indian producer.

Leaders of the industry said that it is against the spirit of the mandatory packaging orders. The details of it are clearly spelt out in the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987.

According to information available from the industry, import of jute products from Bangladesh during the April-November period in 2005-06 is 50,240 tonnes against 9,470 tonnes in the same period of 2004-05. This marks a growth of 530 per cent.

"This data is collected only from the Petrapole-Benapole border route. Imports are also taking place from ports such as Vizag, Kochi and Mumbai. We do not have any records. If all these import figures are collated that it would be over one lakh tonnes by now," a senior jute mill owner said.

Apart from Bangladesh, a lot of jute sacking is also imported from Nepal. "No authority has any information regarding the quantity or the value of imports from Nepal as there is no official monitoring authority," sources said.

The existing duty structure is also helping the jute goods importers. At present, for non-SAARC countries, the basic duty is 15 per cent, plus 2 per cent on account of education and 1 per cent as countervailing duty (CVD).

For the SAARC countries, the basic duty is only 6 per cent. Education cess and the CVD are applicable. For Nepal, the importers need to pay only the education cess.

The phenomenon of increasing imports of jute goods was also noticed last year. In 2004-05, import of jute goods through the Petrapole-Benapole border route was 32,170 tonnes against 9,990 tonnes in 2003-04, marking a growth of 278 per cent.

It was learnt that the leaders of the jute industry had urged the Jute Commissioner's office to take immediate action on the matter.

It might be noted that the mandatory packaging orders give enormous powers to the Jute Commissioner on this account.

The jute industry is already suffering from acute shortage of raw jute after the Union Textile Ministry announced a price ceiling on the golden fibre.

Moreover, the Union Government has kept the pressure on for timely delivery of jute bags for packaging foodgrains. If the industry fails then the mandatory orders may be diluted.

(This article was published in the Business Line print edition dated February 17, 2006)
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