IJMA demands imposition duty on imports from Bangladesh

The Indian Jute Mills Association (IJMA) has raised the demand ahead of the Union Budget to impose duty on imports of jute goods from Bangladesh that has grown by 35 percent in the April-December period of this fiscal at the expense of domestic manufacturers. Over the same period, the domestic jute bags manufacturers have cut production by more than 25 percent.

Under the SAARC treaty, there is zero duty on import of jute goods from Bangladesh, thereby creating a non level playing field between jute manufacturers of India and Bangladesh.

Raghavendra Gupta, IJMA chairman in a note detailing the industry’s pre-Budget expectations said that subsidized jute goods from Bangladesh is flooding the Indian market, severely causing injury to the interests of Indian jute manufacturers.

The countervailing duty on imports of jute goods from Bangladesh, to the tune of 10 percent subsidy extended by the Bangladesh government, has to be facilitated, thereby ensuring a level playing field for Indian jute manufacturers.

The industry has also urged the Union government to expedite the use of jute geo-textiles in at least 15 percent of the road construction undertaken by the Pradhan Mantri Gram Sadak Yojana (PMGSY) programme, as using this product in about 200 projects has been found to be beneficial and cost effective in road construction, river bank protection as well as hill slope stabilization.

In another key demand, the IJMA has sought a long-term policy under the Jute Packaging Materials Act of 1987.

Continuous threat of dilution is a deterrent for the entrepreneurs making substantial investments in jute mills. With the implementation of the policy, there will be much scope to reduce the cost of jute bags supplied to the government for foodgrain packing by as much as 30 percent over the next 2-3 years through technological upgradation of jute mills and product redesigning. Further if market stability is provided by the government to the industry for sacking, the jute mills would be able to increase share of value added jute products from currently two percent to 7-8% in the next 5years, the note said.

On behalf of IJMA, the jute industry has submitted to the Secretary (textiles) some of their outstanding issues and they are hopeful that the forthcoming budget will address some of them. They are also looking forward to announcements regarding their long pending demands of an export incentive scheme, level playing field vis-à-vis Bangladesh and increase in duty drawback rates.

IJMA has also revisited its demand for an export market assistance scheme for boosting jute exports, pointing out that the draft scheme have been pending for approval of the Union textiles ministry for three years.

Year 2015-16 likely will be a critical for the jute industry.