India’s Director General of Foreign Trade (DGFT) has imposed restrictions on jute products imported from the neighboring nation of Bangladesh. In a notification, the DGFT said on Friday that the import of jute, including nine products such as bast fiber, single flax yarn, and woven fabric, is restricted from any land port on the India-Bangladesh border.
Further, the notification stated that importing jute and jute products from Bangladesh is only allowed through the Nhava Sheva Seaport, Mumbai. Additionally, the DGFT notification said that the export of Bangladeshi jute products to Bhutan and Nepal, passing through India, is still allowed. However, re-exporting it to India is not permitted.
Beijing-Dhaka the big worry?
Since the ousting of the Sheikh Hasina government in August last year, the relations between India and Bangladesh have been strained. At the same time, the proximity between Beijing and Dhaka has been growing. This has led to increasing conflict in trade relations between India and Bangladesh.
Secondly, according to DGFT officials quoted by The Indian Express, besides the China factor, circumvention of anti-dumping duty through technical exemptions by the Bagla exports and influx of cheap jute from Bangladesh is harming Indian jute farmers. Due to these reasons, the government has taken a step to restrict the inflow of jute from Bangladesh via land route, the official to The Indian Express.
How do Bangladesh-China ties impact India?
Earlier, due to dumping concerns, India imposed an anti-dumping duty on jute products from Bangladesh. However, raw jute imports from Bangladesh remain outside the purview of anti-dumping duty. Due to this, there is not much effect of anti-dumping duties.
According to The Indian Express report, before anti-dumping duties, jute imports from Bangladesh stood at $138 million in FY17 and saw a nominal decline after the imposition of duties, as it stood at $117 million in FY22. However, in FY24, the value of jute imports from Bangladesh increased to 144 million.
Due to large jute imports, the prices of domestic jute have fallen below Rs 5000 per quintal in FY25. For context, the Minimum Support Price for jute in India is Rs 5335 per quintal. Six jute mills in India remain closed due to Rs 1400 crore in dues.