Domestic use of jute goods is expected to see a robust growth with the inclusion of 11 new products in the mandatory jute packaging list after the anti-dumping duty imposed on jute exports to India.Local jute demand is likely to soar four times to as high as 30 lakh bales with the use of 100 crore jute sacks a year as a result of the extended list under the mandatory packaging rules, said the jute department officials. The textile and jute ministry on January 21 issued a gazette notification amending the Mandatory Jute Packaging Rule-2013 and making the use of jute bags for agricultural products mandatory.From now on, growers and traders will have to compulsorily use jute bags for packaging of chilli, onion, garlic, turmeric, ginger, pulses, coriander, potato, atta, maida, rice husk and bran.The decision of making mandatory jute packaging for 11 new products came after the Indian government on January 5 imposed an anti-dumping duty on jute and jute goods exports from Bangladesh and Nepal. Currently, local use of jute is 7-8 lakh bales with 25-26 crore jute sacks a year mainly due to the mandatory jute packaging of six products.“The decision of adding new products to the mandatory jute packaging list will definitely boost the local use of jute remarkably. Our estimate says local demand of jute sacks will rise to 100 crore which will consume around 30 lakh bales of raw jute,” a jute department official told daily sun.The packaging act made the use of jute sacks mandatory for paddy, rice, wheat, maize, fertiliser and sugar, which actually helped increase the local demand of jute.Domestic use of jute hovered around 1-2 lakh bales a year prior to enforcement of the act late in 2015. The act was put in place as the government wants to limit the use of polythene bags and encourage the use of jute goods on environmental concerns alongside expanding the domestic market of jute goods.India slapped extra duties ranging from $6.30 to $351.72 a tonne on import of jute and jute products from Bangladesh for the next five years, citing that Bangladesh government provides 10 percent subsidy in the jute sector. Prior to this, Bangladeshi jute and jute goods enjoyed zero-duty benefit to the Indian market under the South Asian Free Trade Area (SAFTA).The issue has raised a hue and cry from Bangladeshi jute exporters, business leaders and economic analysts who say the extra duty will cause a big blow to the earnings from jute and jute goods exports.They said the anti-dumping duty will also widen the trade gap between India and Bangladesh further. Exports of jute and jute goods to India in the financial year 2015-16 grew by more than 150 percent to $260.74 million from $104.51 million a year earlier, official figures suggest.Of the $260.74 million, $96.68 million came from export of raw jute, $86.93 million from jute yarn and twine and $57.71 million from the exports jute sacks and bags. Official figures suggest that India accounted for 20 percent of the $919.5 million exports earnings from jute and jute products in 2015-16 fiscal.The share of Bangladeshi jute and jute goods in the Indian market is 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.Jute yarn and twine account for 65 percent of the sector’s annual export receipts. Around 90 percent of jute goods are shipped abroad, according to the Export Promotion Bureau (EPB).Provisional official estimates suggest that the total raw jute production in the country soared to 85 lakh bales In FY16, while the production of jute goods was 9.63 lakh tonnes.The country’s jute sector involves around four million farmers and over 0.1 million workers.
