India imposes restrictions on import of jute, allied fibre products from Bangladesh

New Delhi: India has imposed restrictions with immediate effect on the import of jute and allied fibre products from Bangladesh -- a move that came amid increasing strain in the overall relations between the two neighbours.

The new restrictions will apply to imports into India of Bangladesh's jute and allied fibre products across all land and seaports, with the exception of the Nhava Sheva seaport in Maharashtra, people familiar with the matter said on Saturday.

The Directorate General of Foreign Trade that operates under commerce ministry issued a notification on Friday imposing the restrictions.

Under the provisions of SAFTA (South Asian Free Trade Area), jute from Bangladesh enjoys a duty free access to India.

However, the Indian jute industry has, for long, suffered due to the adverse impact of dumped and subsidised imports of jute products, particularly yarn, fibre and bags from the neighbouring country, the people cited above said.

There is credible evidence that Bangladeshi jute exports continue to benefit from state subsidies extended by the government of Bangladesh, they said.

In response to these concerns, the Directorate General of Anti-Dumping and Allied Duties (DGAD) conducted detailed investigations and imposed anti-dumping duty (ADD) on jute and goods originating from Bangladesh, the sources said.

But, the imposition of ADD has not yielded a substantial reduction in imports, they said.

Apart from various subsidies, common malpractices by Bangladeshi exporters include circumvention of anti-dumping duty through technical exemptions, mislabelling, exports through ADD exempted firms and "misdeclaration" to secure higher subsidies within, the people cited above said.

The restrictions are aimed to counter unfair trade practices, promote 'Atmanirbhar Bharat' (self-reliance), and protect rural livelihoods tied to India's domestic jute economy.

"To safeguard the interests of the domestic jute industry and to counter the unfair trade practices employed by the Bangladesh exporters acting in collusion with Bangladeshi establishment, it has been decided to restrict Bangladesh imports of jute and jute products to India through only from Nhava Sheva port," said one of the people.

"The imposition is expected to streamline the quality checking prevent misdeclaration and fraudulent labelling, thereby neutralising the malpractices that have plagued the industry for long," he said.

"The government is also taking steps to ensure that exporters in Bangladesh do not circumvent the aforesaid restrictions by routing their jute exports through third countries," he added.