Jute exports to India drop after anti-dumping duty

India's imposition of anti-dumping duty on Bangladesh's jute products has started to adversely impact on exports to the neighbouring country.

At least 68 trucks loaded with jute products are stranded at the Benapole Land Port for the last two days after they came to know of the higher rates of duty.

Customs officials said usually 100 to 150 trucks loaded with of jute products crossed into India every day.

"Only three trucks have crossed into India on Thursday and Sunday," said Customs Cargo Unit Revenue Officer Mohammed Shafiullah

According to official figures, India accounted for 20 percent of the $919.5 million exports earnings from jute and jute products in the 2015-16 fiscal.

The share of Bangladeshi jute and jute goods in the Indian market stands at almost eight percent.

In October 2016, an Indian government panel recommended imposing the duty on jute products from Bangladesh and Nepal.

Citing the 10 percent cash incentive in Bangladesh for jute exporters, India's Directorate General of Anti-Dumping and Allied Duties (DGAD) said it allowed Bangladeshi producers to offer lower rates than their Indian counterparts.

On Thursday, the Indian government imposed a duty ranging from $19 to $352 per tonne on all forms of jute yarn, hessian fabric and jute sacks from Bangladesh.

Until now, Bangladesh jute and jute goods enjoyed zero-duty benefit to the Indian market under the South Asian Free Trade Area (SAFTA).

The anti-dumping duty will hit hard jute exports to India, say exporters.

Several Khulna-based exporters said Indian authorities are not allowing their shipments, in line with LCs (letter of credits) initiated before the new duty, to cross the border.

Jahan Ali, who represents the Moon International Jute Mills, said that they would have to count a loss of Tk 2 million for a 60-tonne shipment of jute yarns because of the new rates of duty.

The new anti-dumping duty might lead to closure of many Bangladesh jute mills, which depend on the Indian market, said Probal Shipping Lines Representative Mohsin Ali.

Bangladesh's annual exports of jute yarn, hessian fabric and jute sacks to India stand at almost 200,000 tonnes and yarn accounts over 150,000 tonnes of it.

Businesses say the new duty on top the rate of $800-$900 per tonne of yarn will make it tough for them to compete in the Indian market.