Commerce writes to India to lift anti-dumping duty on jute goods

The Ministry of Commerce has written to the Indian government, asking for a withdrawal of the anti-dumping duty (ADD) slapped on Bangladeshi jute products.

The letter has been sent in the context of the Indian side's "assurance of a review" in response to Bangladesh's request to reconsider the anti-dumping duty at a commerce secretary-level meeting held between the two countries in March this year.

The commerce ministry sent the letter through the foreign ministry on 24 March but has not received an answer from India yet, Md Hafizur Rahman, additional secretary (WTO Cell) of the commerce ministry, told The Business Standard.

In January 2017, India imposed the anti-dumping duty on Bangladesh's jute yarn, hessian and bags, ranging between $19 and $352 per tonne.

Apart from the meeting of the commerce secretaries, Bangladesh has raised its objections to the anti-dumping duty in joint trade talks over the last four years, but India is yet to withdraw the duty.

The two countries in January this year began talks on the lifting of the anti-dumping duty imposed on Bangladeshi jute goods by India.

At the time, India set three conditions for Bangladesh for the withdrawal of the tariff.

First, setting a minimum export price that is higher than the rate at which jute products from Bangladesh were being imported to India. Second, revoking the existing cash incentive on exports of jute goods in case of export to India. And third, conducting a midterm review of whether Bangladesh is dumping jute products in India.

According to people concerned, officials of the relevant government functionaries, including the commerce ministry, discussed the three conditions with exporters. However, the exporters did not agree to comply with the conditions set by India.

They argued at the meeting with the officials that the conditions would establish the allegation that Bangladesh is indeed dumping jute products in India.

"Besides, if the government raises the export price and does not provide cash incentives, the country will lose its competitiveness. As a result, exports of jute products will stop automatically," they added.

To increase the capacity to export jute goods, the government provides a 7% cash incentive on exports of jute yarn and 12% cash assistance on hessian and bag exports.

As a least developed country, Bangladesh can provide this subsidy for exports in accordance with the guidelines of the World Trade Organisation.

At the commerce secretary-level meeting held in Dhaka on 7-8 March, Bangladesh took issue with the three conditions set by India and asked for a lifting of the anti-dumping duty unconditionally.

Citing information from multiple sources about non-dumping of jute goods in India, Bangladesh also suggested that India seek the opinion of the WTO on the issue. The Indian side said at the time it would look into the issue, if communication was received from the Bangladesh side.

In its letter to the Indian government, the commerce ministry wrote, "As per discussions at the commerce secretary-level meeting, the arguments stated during the three rounds of consultation have been re-placed to the government of India for consideration."

"We believe that the government of India will look into the arguments on WTO inconsistencies in the investigation process and withdraw the anti-dumping duty on Jute goods exported from Bangladesh," the letter further read.

Jute products are one of Bangladesh's main export items to India.

According to the Export Promotion Bureau, the country exported $1,096 million worth of goods to India in the 2019-2020 fiscal year. Of the amount, $157 million came from jute and jute products. About 12% of Bangladesh's jute products are exported to India.

Enamul Haque Patwary, former president of the Bangladesh Jute Goods Exporters Association, told TBS that in the last four years there have been many negotiations with India on a lifting of the anti-dumping duty, but all to no avail.

"There does not seem to be any benefit in requesting India. They do what they think is best for themselves. They will withdraw the anti-dumping duty only when they need it," he concluded.