Tofail urges India to scrap jute duty
Commerce Minister Tofail Ahmed urged the Indian government to withdraw the antidumping duty on imports of jute and jute goods to narrow down the trade imbalance between the two countries.
The balance of trade between the two neighbours is heavily tilted toward India, he said.
“India exports more than $6 billion of goods to Bangladesh every year while Bangladesh exports only $600 million of goods to India. Jute and jute goods account for a small segment of exports to India,” Ahmed said.
Moreover, it is believed, goods worth more than $6 billion come to Bangladesh through informal channels through the border areas.
“India will not be affected significantly if the country withdraws the antidumping duty on jute and jute goods as it is a big country,” Ahmed said.
Ahmed spoke at the celebration of the 68th Republic Day of India, at the Institution of Diploma Engineers in Dhaka on Friday.
Bangladesh-Bharat Maitree Samity, a platform to improve ties between Bangladesh and India, organised the event.
India imposed 12.5 percent countervailing duty on exports of Bangladeshi goods to India and up to $329 antidumping duty on exports of jute and jute goods to the neighbouring country.
Earlier, the Indian government allowed duty-free access to all but 25 alcoholic and beverage items from Bangladesh in 2011.
The minister suggested the Indian envoy in Dhaka highlight Bangladesh's troubles with the antidumping duty to the Indian government soon.
The issue of antidumping surfaced after the Directorate General of Anti-Dumping and Allied Duties or DGAD under India's commerce ministry concluded its probe into the matter in October last year.
Bangladesh's jute and jute goods used to enjoy zero-duty benefit on export to the Indian market under the South Asian Free Trade Area agreement.
Three years ago, the Indian Jute Mills Association had accused Bangladeshi exporters -- for the first time in 40 years -- of selling jute products at prices lower than those in India's domestic market.
Then in October in 2015, the Indian anti-dumping authority started its investigation into the matter.
As part of the investigation, a team of DGAD visited some factories in Bangladesh and collected data, including the export prices of the shipped products to India and the sales prices in the domestic market.
Usually, the antidumping duty on a product is the same amount by which it undercuts the domestically manufactured product. The prices of jute yarn in the Indian market tend to be comparatively low.
Bangladesh exports more than 1.1 lakh tonnes of jute yarn to India a year, according to data from Bangladesh Jute Spinners Association. Besides the jute yarn, Bangladesh also exports raw jute and other jute goods.
Jute yarn and twine account for 65 percent of the sector's annual export receipts of over $850 million, according to data from the Export Promotion Bureau and Bangladesh Jute Spinners Association.
The number of trucks carrying jute and jute goods into India through the Benapole land port sharply declined after New Delhi imposed a high antidumping duty on the imports of the goods from Bangladesh.
India on January 5 slapped the antidumping duty on imports of jute and jute goods from Bangladesh and Nepal to “protect the domestic industry”. For Bangladesh, the duty ranges between $19 and $352 per tonne.
Only 10 trucks of jute goods were exported through the port in five days after January 5, which was around 150 trucks a day prior to the imposition of the duty, according to a customs official at Benapole.
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