India curbs jute imports from Bangladesh to protect domestic industry

Business Standard

16 hours ago

India has announced new restrictions on the import of jute and related fibre products from Bangladesh, effective immediately. The latest move comes at a time when tensions between the two neighbouring countries are rising.
The restrictions will apply to all land and seaports except the Nhava Sheva seaport in Maharashtra, according to a report by the Press Trust of India. The Directorate General of Foreign Trade (DGFT), under the Commerce Ministry, issued a notification on Friday confirming the restrictions.
Jute imports have hurt Indian industry
Under the South Asian Free Trade Area (SAFTA) agreement, jute products from Bangladesh currently enjoy duty-free access to India. However, the Indian jute industry has reportedly suffered for years due to low-priced and subsidised imports, particularly of yarn, fibre, and bags from Bangladesh.
"There is credible evidence that Bangladeshi jute exports continue to benefit from state subsidies extended by the government of Bangladesh," said one of the people quoted in the PTI report.
Anti-dumping measures haven't worked
In response to the issue, the Directorate General of Anti-Dumping and Allied Duties (DGAD) previously carried out investigations and imposed anti-dumping duties on jute and related products from Bangladesh. However, sources told PTI said the duties have not led to a significant decline in imports.
Malpractices by some Bangladeshi exporters, they added, include mislabelling, misuse of technical exemptions, exporting through firms exempted from anti-dumping duties, and "misdeclaration" to claim higher subsidies.
Earlier in May, the Indian government imposed new port restrictions on the import of a range of goods from Bangladesh. The move, widely seen as a retaliatory measure, followed Dhaka's decision to close its land ports to Indian yarn exports.
The Directorate General of Foreign Trade on May 17 issued a notification detailing the restrictions. It restricted the import of goods such as readymade garments, processed food items, carbonated drinks, plastic goods, and wooden furniture.
Self-reliance and rural jobs a priority
The Indian government said the new restrictions aim to tackle unfair trade practices, support the 'Atmanirbhar Bharat' (self-reliant India) initiative, and protect livelihoods in the rural jute sector.
"To safeguard the interests of the domestic jute industry and to counter the unfair trade practices employed by the Bangladesh exporters acting in collusion with Bangladeshi establishment, it has been decided to restrict Bangladesh imports of jute and jute products to India through only from Nhava Sheva port," said one of the sources.
"The imposition is expected to streamline the quality checking, prevent misdeclaration and fraudulent labelling, thereby neutralising the malpractices that have plagued the industry for long," he said.
"The government is also taking steps to ensure that exporters in Bangladesh do not circumvent the aforesaid restrictions by routing their jute exports through third countries," he added.
Political fallout after Sheikh Hasina's ouster
The imposition of these trade barriers marks a sharp downturn in bilateral ties between India and Bangladesh. The relations between the two neighbours have soured significantly following the ouster of the Sheikh Hasina-led government in Bangladesh — a longstanding ally of New Delhi.
Her departure ushered in an interim government led by Muhammad Yunus, which has faced criticism for failing to curb attacks on minorities, particularly Hindus. This political instability and human rights concerns have contributed to the diplomatic chill and increased mistrust between the two countries.