The Indian government has imposed an anti-dumping duty on Jute yarns and twines and Jute products of Bangladesh and Nepal origin on January 5th, 2017. As there had been complaints of local players in India earlier, the Directorate General of Anti-Dumping and Allied Duties (DGAD) had initiated an investigation on imports of the products already in 2015. The final outcome of this investigation has proved that there is indeed dumping of jute goods and these imported jute goods were undercutting and suppressing the prices of the Indian Jute Industry. Dumping has caused injury to the Indian Jute Industry, in terms of profitability, return on investments and cash flow. That is why the DGAD recommended the Indian government to impose an anti-dumping law on Jute yarns and twines and Jute products deriving from Bangladesh and Nepal. This anti-dumping duty ranges from USD 6,30 to USD 351,72 per metric ton on imports of jute and its products from Bangladesh and Nepal, in order to protect the domestic Jute industry.
Bangladesh newspapers have already reported, that the number of trucks carrying Jute yarns and twines and Jute products into India through the Benapole land port sharply declined after India imposed anti-dumping duty on the imports of these goods from Bangladesh. During the last five days, only 10 trucks carrying jute goods were exported to India. Normally it is a number of 150 trucks, which used to enter India per day. In 2015-16 Bangladesh exported jute and jute goods worth 919,58 Mio-USD. Out of that amount about 20% went to India, which used to be the second biggest market for jute and its products from Bangladesh. That is why many mills in Bangladesh, which were relying on 100 per cent on exports to India, may face closure, because of the high duties imposed by India. The Dhaka Chamber of Commerce and Industry (DCCI) has already expressed its fears that anti-dumping duties would widen Bangladesh’s trade gap with India. The DCCI has urged the Bangladesh government to take up the issue with India immediately, in order to discuss and negotiate the issue with the Indian government for a review of their decision.
A National Advisory Committee meeting in Dhaka on 10th January decided to engage immediately with India. The meeting held at the textiles and jute ministry, also decided that the duty issuance would be discussed during prime minister’s upcoming visit to India. A number of stakeholders, who participated in the meeting, held with Minister of Textiles and Jute Md Emaj Uddin Pramanique in the chair, told The Daily Star, that Bangladesh would use “diplomatic and political” means first before going for any legal recourse involving the World Trade Organization (WTO).
Of the total 919 Mio-USD worth of jute and goods Bangladesh exported in the last financial year (2015-16) over 260 Mio-USD of the same were sent to India. Of that total, 96,68 Mio-USD was raw jute, 86,93 Mio-USD Jute yarns and twines and 57,72 Mio-USD jute sacks and bags. Industry sources said the Indian move came as part of its protection mechanism to cushion its local jute industry from regional competition, and would have no implication on raw jute import from Bangladesh. But it has already started to have a negative impact on the import of jute goods from Bangladesh.
Nepalese daily The Katmandu Post quoted the Himalayan country’s Jute Industry Association President Raj Kumar Golcha is saying, “India’s move has put the already struggling Nepali jute industry on the verge of collapse”. Nepalese jute producers import 70% of raw jute from Bangladesh and export finished products to its southern neighbor. Nearly 95% of Nepalese jute produces are exported to India.
As per our opinion this Anti-Dumping law will have a huge impact on the market prices in India as well as in Bangladesh. India might face difficulties in being as competitive as they have been in the past, when it comes to jute fabrics/cloth, as the lion share of Indian mills was strongly relying on cheap jute yarns and twines imported from Bangladesh. One could already recognize a price increase of 25-30 % for jute goods from India within the last couple of days.
It also might happen, that this situation will motivate more Bangladesh Jute Spinners to turn their spinning mills into composite jute mills, in order to make a fortune out of this situation. This may lead to even stronger competition in Bangladesh itself, as well as strong competition between Bangladesh and Indian jute mills.
Information provided by: WILHELM G. CLASEN GmbH & Co. KG
