India Restricts Jute Imports from Bangladesh to Protect Farmers and Mills

New Delhi — India has imposed immediate port restrictions on the import of jute and allied fibre products from Bangladesh in a bid to curb the influx of cheap, subsidised goods that have harmed local farmers and led to underutilisation and closures of Indian jute mills.

According to an official statement, these restrictions will apply to imports through all land and seaports, except for the Nhava Sheva seaport.

The decision is aimed at countering unfair trade practices, promoting self-reliance under the Atmanirbhar Bharat initiative, and safeguarding rural livelihoods dependent on India’s jute sector.

The government also plans to implement measures to prevent Bangladeshi jute products from entering India through third countries to bypass the restrictions.

Bangladeshi jute enjoys duty-free access to the Indian market under the South Asian Free Trade Area (SAFTA) agreement. However, India claims this preferential access has been misused to the detriment of its domestic jute industry. The sector has long suffered from the impact of dumped and subsidised imports, particularly of jute yarn, fibre, and bags from Bangladesh.

Authorities say there is credible evidence that Bangladeshi jute exports continue to benefit from state subsidies provided by the Government of Bangladesh. In response, India’s Directorate General of Anti-Dumping and Allied Duties (DGAD) had earlier imposed anti-dumping duties (ADD) on jute products from Bangladesh.

Despite these measures, imports have not declined significantly. Large exporters have managed to circumvent the duties through technical loopholes, misdeclarations, and by routing exports through exempted firms whose declared export volumes exceed their production capacities.

Before the imposition of ADD, jute imports from Bangladesh stood at $138 million in 2016-17. Although they dipped slightly to $117 million in 2021-22, imports rose again to approximately $144 million in 2023-24.

As a result, domestic jute prices have dropped below ?5,000 per quintal for the 2024-25 financial year, lower than the minimum support price (MSP) of ?5,335 per quintal. This price crash has triggered a liquidity crisis, with six mills shutting down and dues amounting to ?1,400 crore, along with ?400 crore in outstanding legacy payments.

The influx of cheap, underpriced jute goods from Bangladesh has also led to significant underutilisation of capacity in Indian mills, putting their long-term sustainability at risk.

Although Bangladesh has made minor adjustments in response to India’s concerns, it continues to heavily incentivise jute exports, especially for value-added products. Notably, raw jute imports from Bangladesh remain outside the scope of ADD, leaving Indian jute farmers vulnerable to the impact of dumping.

India’s jute industry plays a vital role in supporting rural livelihoods, particularly in West Bengal, which contributes around 78% of the country’s jute production. Other key producing states include Bihar, Assam, Odisha, Andhra Pradesh, Tripura, and Meghalaya.

The jute industry is estimated to provide direct employment to over 400,000 workers in mills and related sectors, while supporting the livelihoods of lakhs of farming families. Additionally, a significant number of people are involved in the trade and transport of jute.

Nearly 90% of India’s jute output is consumed domestically, with much of it procured by the government. The artificially depressed prices caused by subsidised imports have directly impacted farmers' incomes, further underlining the need for corrective action.

With inputs from IANS