India’s Department of Commerce under the Ministry of Commerce and Industry has initiated an investigation to impose a countervailing duty on imports of jute goods from Bangladesh – a similar investigation that the contrary is also being conducted against Nepal.
The department announced the investigation on 29 September following a joint petition from the Indian Jute Mills Association (IJMA) and the AP Mesta Twine Mills Association (AJMA), seeking the imposition of countervailing duties on jute products imported from Bangladesh and Nepal. The Indian side has officially informed Bangladesh’s Ministry of Commerce about the matter.
Although the countervailing duty investigation has just started, the Indian government had already imposed an anti-dumping duty on the same jute products from Bangladesh in 2018. Initially, the duty was imposed for five years, but in 2023, it was extended for another five years.
At that time, anti-dumping duties ranging from USD 6 to USD 352 per tonne were levied on Bangladeshi jute products, depending on the product category. The Indian authorities had first initiated an anti-dumping investigation in 2015, alleging that Bangladeshi jute mill owners were exporting jute goods to India at prices lower than production costs.
Bangladesh’s private jute mill owners have expressed concern over India’s new initiative to impose another duty. They say India is one of the largest markets for Bangladeshi jute products, but exporters are frequently facing new tariff and non-tariff barriers. If new duties are imposed again, exports to the Indian market will decline further, potentially forcing many jute mills to shut down.
Tapas Pramanik, chairman of the Bangladesh Jute Spinners Association, told that the demands made by Indian businesspeople are unreasonable. India has started a countervailing duty investigation without following proper rules and procedures. The government must take this matter seriously and respond appropriately.
He added that currently, bilateral relations between the two countries are not good. Exports through land ports have been suspended, increasing costs. Apart from that, there are tariff and non-tariff barriers. If countervailing duties are imposed again, the business will face even greater losses.
In its investigation notice, India’s Department of Commerce said that IJMA and AJMA had requested the government to initiate a countervailing duty investigation on imports of jute goods from Bangladesh and Nepal. The two trade organisations alleged that exporters from these countries receive various subsidies and cash incentives from their governments, leading to an increase in imports of jute goods into India and a significant decline in profits for Indian industries.
The Indian authorities had first initiated an anti-dumping investigation in 2015, alleging that Bangladeshi jute mill owners were exporting jute goods to India at prices lower than production costs.
Although eight jute mills—members of IJMA and AJMA—filed the complaints, none of them directly import jute goods from Bangladesh or Nepal. However, they claim that the imported products are similar to those they produce.
The products under investigation include jute yarn, sacking bags and fabrics, hessian bags and fabrics. In addition, jute products containing mineral or vegetable oil and diversified jute products are also subject to investigation. However, blankets, decorative fabrics, handicrafts, carpet backing cloth, and gift or fancy items are excluded. The investigation period has been set for 12 months, from April last year to March this year.
Regarding the subsidies received by Bangladeshi jute exporters, the investigation notice states that factories in Bangladesh’s export processing zones (EPZs) are exempt from dividend tax and receive electricity at prices lower than the market rate. Moreover, factories in economic zones enjoy a 10-year tax holiday and exemption from import duties on raw materials. They also receive cash incentives and exemptions from duties and VAT on capital machinery imports.
Several officials at Bangladesh’s Ministry of Commerce said that before launching a countervailing duty investigation, the accusing country must hold a consultation meeting with the accused country. India’s Department of Commerce notified Bangladesh’s Ministry of Commerce on 1 September about such a consultation meeting. Bangladesh requested two months to prepare, but India did not grant the time. According to India’s investigation notice, Bangladesh and Nepal did not participate in the consultation meeting held on 1 September.
Moinul Khan, chairman of the Bangladesh Trade and Tariff Commission, told on Monday, “The Indian government is currently conducting the investigation. We will request to hold a consultation meeting. A special desk led by a commission member has been set up to assist our exporters.”
According to data from the Export Promotion Bureau (EPB), Bangladesh exported a total of USD 820 million worth of jute and jute goods in the 2024–25 fiscal year, of which jute goods accounted for USD 670 million. In the last fiscal year, Bangladesh exported about USD 85 million worth of jute products to India.
When asked, former member of the Bangladesh Trade and Tariff Commission, Mostafa Abid Khan, told Prothom Alo on Wednesday, “If India imposes a new countervailing duty, it’s uncertain whether we can continue exporting jute products to India. During the Covid-19 pandemic, India once considered imposing a similar duty, but after a consultation meeting, we presented our arguments, and they did not proceed with the investigation. Given the current state of diplomatic relations between the two countries, it will be difficult for our government to handle the issue.”
Relying to another question, Mostafa Abid Khan added, “The Ministry of Commerce must prepare after reviewing the petition of allegations. However, this requires experienced personnel. I believe Bangladesh will have the opportunity to present counterarguments against the allegations.”
Courtesy: Prothom Alo Online
