Summary 

The Directorate General of Trade Remedies (DGTR) of India has advised the finance minister to once more apply anti-dumping duties for an additional five years on Bangladeshi exports of jute products.

Content 

On October 10, the supreme national authority of India, which is in charge of overseeing all trade corrective actions, released a gazette notification in this respect on its website. This prompted Bangladesh’s commerce ministry to begin talks with exporters to decide the best course of action.

The Indian finance ministry has been asked by the DGTR to apply anti-dumping duties on jute goods coming from Bangladesh and Nepal at the previous rate for a period of five years beginning on the day the gazette notification was issued.

However, the finance ministry has not yet made any public announcement on this. India levied anti-dumping penalties on Bangladeshi jute exports in January 2017 that ranged from $19 to $352 per tonne for five years. The nation began a study on whether to continue the duty after the five-year period expired on January 1 of this year.

When asked about the situation, Md. Hafizur Rahman, director general of the Ministry of Commerce’s WTO Cell, informed The Business Standard that the problem had been brought to their attention and was being looked into. The next actions in this respect are now being discussed with exporters of jute goods, the speaker continued.

AHM Mustafa Kamal, the finance minister for Bangladesh, and Tipu Munshi, the minister of commerce, had already written to their Indian counterparts pleading with them not to reimpose the anti-dumping penalties on jute exports. Tipu Munshi revealed to TBS at the time that he and his cabinet colleagues had made the request based on a promise from India to that effect.

Prior to the recent visit of the Bangladeshi prime minister to Delhi, the Indian commerce secretary had hinted that a statement may be made about this matter. However, there was no mention of this in the two nations’ prime ministers’ joint statement. According to the DGTR’s advice, Bangladesh boosted its cash subsidy on jute goods from 7.5% to 10% in August 2017 after the anti-dumping duty was imposed.

In September of 2018, it was increased by an additional 2%. Once the levees were removed, these incentives ran the danger of expanding the nation’s jute exports to India. Additionally, it noted Bangladesh’s 2011 National Jute Policy, which aimed to increase the sector’s competitiveness.

The local jute industry will be negatively impacted by the dumping, according to the DGTR, who suggested the levy. Following the DGTR advice, the Bangladeshi exporters participated in a virtual conference with the Ministry of Commerce on Wednesday where they voiced their disapproval of the Indian decision.

The Designated Authority “considers it reasonable to recommend the extension of the anti-dumping duties on the imports of the subject products from the subject countries” in light of the facts and circumstances of the case, as stated above.

The head of the Bangladesh Jute Goods Exporters Association, Mohammad Shafiqul Islam, asserted that if the anti-dumping tax is reinstated, it will have a detrimental effect on the exports of jute and jute-related goods. He asked the administration to use diplomatic means to prevent the duty from being levied once more.

One exporter, who requested anonymity, told TBS: Therefore, a letter is sent from the Ministry of Commerce to the Ministry of Finance. The Bangladesh Ministry of Finance will formally request the Indian Ministry of Finance not to impose the anti-dumping obligations recommended by the DGTR. 

Exports of jute and jute products have slowed in recent years since the Indian government introduced tariffs. In the last financial year, Bangladesh’s total exports increased by more than 34% while jute exports showed negative growth.

In the 2021/22 financial year, jute yarn, twine, sacks and bags registered a negative growth of 14% compared to the previous year’s exports. Finance Minister AHM Mustafa Kamal had assured his Indian counterparts in a letter that the anti-dumping cessation would not lead to an increase in jute exports from Bangladesh.

He said, Land for growing raw jute in Bangladesh is very limited due to lack of land, so the production of raw jute in Bangladesh has remained the same for the last five years and is likely to increase in the near future.

“As you may know, our jute industry faces the challenge of paying wages to a large number of poor workers there due to various existential crises, including those caused by climate-related disasters and risks. The government is therefore providing limited support, mainly to stabilize the sector, with the aim of saving the livelihoods of millions of workers and peasants,” he added.

Mustafa Kamal has called on India’s finance minister to resolve the issue through the WTO if government financial support for jute exports raises concerns for India.

Picture and Article Source: The Business Standard