According to data from the Export Promotion Bureau, the jute industry in Bangladesh earned $548 million selling jute and jute items in the first seven months of the outgoing fiscal year of 2022-2023 – a decrease of 21.22 percent year-on-year. The export proceeds for the same period in 2021-2022 were $696 million, a decrease of nine percent from the previous year.
Since India is a large market for Bangladesh's jute, the anti-dumping policy presents a significant hurdle for us. About 500,000 people work in the jute business. The government is providing incentives in an effort to preserve the jute industry and the livelihoods of numerous people. Without incentives, factories cannot be operated. Anti-dumping taxes are increasingly reducing Bangladesh's exports to India. The Bangladeshi government is persistent in its demands that the anti-dumping measure be lifted or that the import tax on jute be raised.
The Bangladeshi administration has to start talks as soon as possible. The Comprehensive Economic Partnership Agreement (CEPA) that has been suggested may serve as a useful framework for the negotiations.
India levied an anti-dumping charge on Bangladeshi jute exports in January 2017 that ranged from $19 to $252 per tonne and was in effect for five years. Jute yarn, hessian fabric, sacking, and CBC and jute bags exported from Bangladesh and Nepal were subject to anti-dumping duties per an order from the Department of Commerce of India's Ministry of Commerce and Industries. In order to safeguard their jute sector and boost exports, Indian traders have urged that this tariff be kept in place. According to the regulations, no product may be subjected to anti-dumping duties for a duration of more than five years. Therefore, in 2023, India renewed the anti-dumping tax imposed on Bangladeshi jute products. The jute sector in Bangladesh has suffered as a result of the increase in taxes on exports.
Given that we previously shipped more than 1.45 lakh tonnes of jute products to the Indian market, such a levy puts a detrimental effect on our jute product exports. The exports of the goods have decreased to roughly 35,000 tonnes after anti-dumping duties were imposed.
Bangladesh is a major exporter of jute products since, in general, the costs of producing jute goods here are lower than in other nations. The cost of exporting to India, a significant market for jute, will rise as a result of the prolongation of the anti-dumping tax, which may have an impact on the overall competitiveness of Bangladesh's jute products on the international market. As a result, there might be less demand for jute items made in Bangladesh and more demand for those made in other nations.
India, China, and Turkey are the main export destinations for jute products from Bangladesh. Since India implemented anti-dumping tariffs in 2017, China and Turkey have taken advantage of the chance to lower the cost of jute products. This competition among Bangladesh's jute export destinations for market share is unfair. Many jute mills have shut down as a result. Aside from this, the historical link with India prevents an appeal of the anti-dumping duty. Once more, raw jute exports to India cannot be halted. As a result, it is clear that they are successfully using raw jute without our interference, and beating us in the process.
Any nation that is a part of the World Trade Organization (WTO) has the right to use the Dispute Settlement Understanding (DSU) process to object to the deployment of anti-dumping measures. This enables the discussion of any concerns regarding adherence to the Anti-Dumping Agreement's requirements before a panel (set up in accordance with the DSU). Given the close ties between Bangladesh and India, it would be ideal if the disagreements could be settled through bilateral or diplomatic channels before bringing the case to the WTO. The Comprehensive Economic Partnership Agreement has the potential to change such a bilateral dialogue. Bangladesh now receives the most lines of credit (LOC) from India.
As a result, the CEPA will serve as both a comprehensive economic framework and a tool for maximising the benefits of each country's strategic geographic location. Pranay Verma, the high commissioner of India to Bangladesh, recently stated that the planned CEPA might fundamentally alter trade relations between the two nations.
In order to walk the rhetoric, the commerce ministry has asked more than 58 state agencies and trade organisations for their perspectives on investment and trade in relation to the CEPA. To enhance trade and investment, Bangladesh is about to start negotiations with its second-largest trading partner. The advisory committee (AC) – chaired by commerce minister Tipu Munshi – and the trade negotiating committee (TNC), each with 11 members, have already been established by the commerce ministry. The Regional Trade Agreement (RTA) Policy 2022 states that the TNC of Bangladesh will continue the negotiations in conjunction with the Indian TNC and will acquaint the relevant authorities on a regular basis.
Bangladesh may consider asking India to remove its anti-dumping measures on jute as CEPA will serve as the comprehensive economic framework between Bangladesh and India, thereby boosting trade between the two nations.