Jute goods exports to India come to a halt

Jute goods exports to India come to a halt
Star Business Report

Nearly 300 trucks carrying Bangladeshi jute goods to India had to come back from Benapole after the Indian customs authorities abruptly imposed 14 percent duties on products from natural fibre, officials and traders said.

Consignments of jute goods, which had been enjoying duty exemption since 2004, weighing hundreds of tonnes were stuck in Benapole and Indian port Petrapole, since January 18, said businessmen and government officials.

Jute bags weighing 1,500 tonnes worth Tk 11.45 crore, jute carpeting bags weighing 502 tonnes worth Tk 49.75 lakh and jute yarns weighing 400 tonnes worth Tk 2.85 crore could not be exported to India in 23 consignments between January 18-19.

Mushfiqur Rahman, assistant commissioner of customs at Benapole, said Bangladesh could not export jute bags, carpeting cloth bags and hessian after India imposed 14 percent duties on the items.

Buro Dada, manager of Kolkata-based importer JK Associates, said no consignment of jute products from Bangladesh reached India in the last two days.

Traders said the duties would make Bangladeshi jute goods, which has seen a revival recently thanks to rising global demand for the natural fibre, uncompetitive.

An Indian importer in an email to Bangladesh Jute Mills Corporation (BJMC) said: “Sudden imposition of around 14 percent duty on imported jute goods from Bangladesh is unfair. Law of the country says that no duty shall be imposed on imported materials, which is not paid by Indian manufacturers.”

No Indian mills or manufacturers have to pay such duty, and it is only imported jute goods from Bangladesh, which have to bear this burden, he said.

Since January 18, Petrapole customs have claimed that they have received a directive from higher authorities to collect the excise duty against imports of jute goods from Bangladesh.

The new duty structure includes 8 percent countervailing duty (CVD), 4 percent additional CVD and other charges of 2 percent, totalling to 14 percent of the invoice value.

A Barik Khan, secretary of Bangladesh Jute Mills Association, said about 150 trucks carrying over 1,500 tonnes of jute goods worth Tk 11.50 crore were stuck at Benapole. “We had to take them back as no Indian importer will profit by paying 14 percent duty.”

He said Indian importers have informed them that they would not be able to take in products with such high duties. As a result, all agreements between Bangladeshi exporters and Indian importers will fall to bits.

Khan said the country’s jute goods producers will face serious problems if the issue is not settled immediately. “Hundreds of products will lie unsold in the mills, meaning we will not be able to pay wages to the workers and repay bank loans. It may even create unrest inside and outside the jute mills,” he warned.

GL Modi, another exporter, accused Indian Jute Mills Association of creating the current situation. “Two top officials of the association have long been trying to convince the government to ban imports of jute goods from Bangladesh. Our Indian agents have informed us about the matter.”

Uttara Jute and Fibre Ltd and Nobarun Jute Mill Ltd, owned by GL Modi had already taken back eight trucks full of jute goods from Benapole after Indian importers instructed them to do so fearing losses following imposition of duties.Others also followed suit.

Of them, the state-run BJMC recalled 50 to 60 trucks carrying jute goods, said its chairman TD Mitra. Only a handful of consignments, which entered the Indian side on Tuesday, could pass on in the last coupe of days, said Modi.

Local exporters yesterday met the commerce minister, seeking immediate steps from the government. They also met the jute minister on Wednesday.

A commerce ministry official said the minister already instructed the officials to find ways to address the issue. “We have to move forward according to World Trade Organisation (WTO) rules,” he said.