With Bangladesh blunting the edge of domestic jute manufacturers in the export market, Indian manufacturers have urged the government for an external market assistance scheme.
“In its absence, we have been reduced to residual sellers in the global market. We are not in a position to compete with Bangladesh, which offers 10 per cent cash subsidy to its exporters,” said Raghav Gupta, chairman, Indian Jute Mills Association (Ijma), the apex body of the industry.
Indian jute manufacturers ship around 200,000 tonnes of jute goods abroad, valued at Rs 2,000 crore. Bangladesh exports 800,000 tonnes, worth Rs 5,000 crore. In 2013-14, India exported no raw jute; Bangladesh exported both raw jute and jute goods.
Jute manufacturers were also let down by political turmoil in major jute bag-importing countries such as Thailand and Syria, leading to the loss of nearly 75,000 tonne of export demand.
Rising import from Bangladesh is another worrying factor. Under South Asian Association for Regional Cooperation (Saarc) treaty, there is no customs duty on jute goods import from Bangladesh. While the cash subsidy of 10 per cent on jute goods export from Bangladesh is also applicable to those made in India.
Ijma has called for imposition of a countervailing duty on import of jute goods from Bangladesh, to the tune of the subsidy extended by the Bangladesh government, to ensure a level arena for Indian manufacturers.