India's tariff body for anti-dumping duty on Bangladeshi jute goods for another 5yrs

Infographic: TBS

India's Directorate General of Trade Remedies (DGTR) has recommended its finance ministry to again impose anti-dumping duty on jute goods exports of Bangladesh for another five years.

India's apex national authority responsible for administering all the trade remedial measures published a gazette notification in this regard on its website on 10 October, prompting Bangladesh's commerce ministry to initiate discussions with exporters to determine the course of action.

The DGTR has requested the Indian finance ministry to impose anti-dumping duty on jute products from Bangladesh and Nepal at the previous rate for five years from the date of issuance of the gazette notification.

The finance ministry, however, is yet to issue any official notification about this.

In January 2017, India imposed anti-dumping duties ranging from $19 to $352 per tonne for five years on jute exports from Bangladesh. 

After the five-year period expired on 1 January this year, the country started a review on keeping the duty for a while longer.

Asked about the development, Director General of WTO Cell of the Ministry of Commerce Md Hafizur Rahman told The Business Standard that the matter has come to the ministry's notice and was under review.

"Discussions are going on with exporters of jute products on the next steps to be taken in this regard," he added.

Earlier, Bangladesh Finance Minister AHM Mustafa Kamal and Commerce Minister Tipu Munshi wrote to their Indian counterparts, asking them to not impose the anti-dumping duties on jute products once again. 

At the time, Tipu Munshi told TBS that he and his cabinet colleagues had made the request on the basis of an assurance to that end by India.

The commerce secretary of India had earlier indicated there might be an announcement on this issue during the Bangladesh prime minister's recent visit to Delhi.

But the joint statement of the prime ministers of the two countries did not mention anything in this regard.

After the DGTR recommendation, the Ministry of Commerce held a virtual meeting with Bangladeshi exporters on Wednesday during which they expressed concern over the Indian move. 

In the DGTR's recommendation, it said post imposition of the anti-dumping duty, Bangladesh in August 2017 increased its cash subsidy from 7.5% to 10% on jute products. 

It was further enhanced by 2% in September 2018. These incentives risked increasing the country's jute exports to India once the duties expired.

It also mentioned Bangladesh's National Jute Policy in 2011, which was geared towards making the sector more competitive.

The DGTR recommended the duty, saying otherwise the dumping would have an effect on the local jute industry.

"Considering the facts and circumstances of the case, as established hereinabove, the Designated Authority considers it appropriate to recommend extension of the anti-dumping duties on the imports of the subject goods from the subject countries," it said.

Mohammad Shafiqul Islam, chairman of Bangladesh Jute Goods Exporters Association, said if the anti-dumping duty is again instituted then it will have a negative impact on jute and jute product exports. 

He urged the government to take diplomatic efforts to ensure the duty is not imposed again.

An exporter, requesting anonymity, told TBS, "We will write to the commerce ministry. Accordingly, a letter will be sent from the Ministry of Commerce to the Ministry of Finance. The Ministry of Finance of Bangladesh will formally request the Indian finance ministry not to impose an anti-dumping duty recommended by the DGTR."

The export of jute and jute goods has been doing poorly over the past few years since the Indian government imposed the duty. In the last fiscal year, Bangladesh's overall export increased by more than 34%, but jute registered a negative export growth.

In the Fiscal Year 2021-22, jute yarn, twine, sacks and bags posted 14% negative growth compared to exports in the previous year.

Earlier, in a letter Finance Minister AHM Mustafa Kamal assured his Indian counterpart that discontinuation of the anti-dumping would not result in a surge of Bangladeshi jute exports.    

"Availability of land for growing raw jute in Bangladesh is very limited due to scarcity of land and therefore quantity of production of raw jute in Bangladesh has remained the same during the last five years. There is no possibility of any increase in the foreseeable future,'' he said.

"You may be aware that our jute industry has been facing continuous challenges in paying a large number of poor workers working therein due to various existential crises, including those imposed by climate induced disasters and risks. Therefore, the government offers limited support mainly to stabilise the sector with the objective of saving the livelihoods of millions of workers and farmers," he added.

Mustafa Kamal requested the Indian finance minister to resolve the matter through the WTO if the government's cash support against jute export is a matter of concern for India.