Friendship does not work as India continues anti-dumping duty on BD jute goods

Bangladesh is going to defend its position and question India’s logic in imposing countervailing duty (CVD) on jute and jute goods from Bangladesh to India.

A team from the commerce ministry is going to attend a consultation meeting to be held at the office of the Director General of Trade Remedies (DGTR) in New Delhi on October 30 regarding the imposition of CVD on Bangladeshi jute and jute goods.

The team will mainly highlight that Bangladesh’s subsidies in the jute and jute goods industry do not hamper the Indian jute and jute goods sector.

India said Bangladesh gives subsidies in jute and jute goods sectors to factories housed inside Export Processing Zones (EPZs).

But no jute and jute goods factory is located inside EPZs.

Moreover, since there is already an anti-dumping duty (ADD) imposed on jute in India, it would not be right to fix CVDs on the same goods in the same market.

India started an investigation to levy CVD as it thinks its domestic jute industry is being hurt by subsidies provided by Bangladesh.

CVDs are tariffs on imported goods that are imposed to offset subsidies given by the exporting country’s government while ADDs are protectionist tariffs that a domestic government imposes on foreign imports that it believes are priced below fair market value.

Currently, Bangladesh gives a 12 per cent cash incentive on the export of jute goods such as hessian and sacks and a 7 per cent incentive on jute fibres like yarn and twine.

A 20 per cent subsidy is extended against the export of carbon and jute particle boards produced from the natural fibre.

The association informed the DGTR that Bangladesh is giving a lot of subsidies for the import of capital machinery used by the jute industry.

The cash incentives and subsidies are making Bangladesh’s jute and jute goods industry more competitive and are affecting the Indian jute industry.

Jute and jute goods shipments to India stumbled due to the ADDs, which range from 5 per cent to 30 per cent.

In 2017, India imposed ADDs ranging from $19 to $352 per tonne on jute exported from Bangladesh for five years.

It renewed the measure in 2022.

Bangladesh government’s all-out friendship and political understanding nothing worked for national interest of Bangladesh in uplifting anti-dumping duty.