Govt hopes for India’s anti-dumping duty removal on jute

Highlights

• India imposed the anti-dumping duty on jute in 2017 
• Bangladesh's jute export has been performing poorly since then 
• The 5-year duty imposition supposed to end in January this year
• Bangladesh requests its neighbour not to continue the measure  
• Dhaka yet to receive any official response from Delhi in this regard

After writing separately to India's finance and commerce ministers, Dhaka is optimistic that New Delhi would remove the anti-dumping duty on Bangladesh's jute and jute-made products soon.

"India said they will decide on the duty withdrawal based on the fact that we write to them formally," Commerce Minister Tipu Munshi told The Business Standard last week.

"During the recent visit to India, Commerce Secretary Tapan Kanti Ghosh came to know that India is considering the withdrawal of the duty," Tipu Munshi added.

However, a commerce ministry official told TBS that Dhaka is yet to receive any official response from India in this regard.

The Indian jute industry had been complaining over Bangladesh's cash incentive to jute exports, claiming India's jute industry was suffering due to Dhaka's subsidised operations. In 2017, the neighbouring country imposed the protectionist measure of anti-dumping duty to guard its local jute industry.  

The imposition, ranging between $19 and $352 per tonne on Bangladesh's jute yarn, hessian and bags, was for five years.

The export of jute and jute goods has been performing poorly over the past few years since the Indian government imposed the duty. Last fiscal year, Bangladesh's overall export increased by more than 34%, but only jute registered a negative export growth.

In FY2021-22, jute yarn, twine, sacks and bags posted 14% negative growth compared to export in the previous year.

Meanwhile, India's anti-dumping duty imposition was supposed to end this January. According to the World Trade Organization (WTO) rules, no anti-dumping duty can be imposed on any product for a period of more than five years.

But following the application of six Indian companies, New Delhi has taken the initiative to conduct a "sunset review" – an evaluation of the need for the continued existence of a programme or an agency – to extend the existing anti-dumping duty on Bangladesh's jute.

Against the backdrop, Commerce Minister Tipu Munshi sent the letter to India's Commerce Minister Piyush Goyal in March. In June, Finance Minister AHM Mustafa Kamal sent another letter to his Indian counterpart Nirmala Sitharaman.

'Lifting anti-dumping wouldn't surge export' 

Finance Minister AHM Mustafa Kamal assured his Indian counterpart that discontinuation of the anti-dumping would not meet with a surge in jute export by Bangladesh.    

"Availability of land for growing raw jute in Bangladesh is very limited due to scarcity of land and therefore quantity of production of raw jute in Bangladesh has remained the same during the last five years. There is no possibility of any increase in the foreseeable future. Therefore, fear of any surge in export from Bangladesh after withdrawal of duty as claimed in the application [by six Indian jute industries to the Indian authorities] is totally unfounded," the finance minister wrote in the letter. 

He said, "You may be aware that our jute industry has been facing continuous challenges to pay a large number of poor workers working therein due to various existential crises including those imposed by climate induced disasters and risks. Therefore, the government offers limited support mainly to stabilise the sector with the objective of saving the livelihoods of millions of workers and farmers."

Mustafa Kamal requested the Indian finance minister to resolve the matter through the WTO if the government's cash support against the jute export is a matter of India's concern.