Bangladesh approached the Indian tribunal for removal of the anti-dumping duty on jute sacking from the country, media reports said, as it's considered a trade barrier.
Indian Free Press Journal in a report Wednesday quoted Bangladesh High Commissioner in Delhi Syed Muazzem Ali as saying: "Those (anti-dumping) issues are brought before the tribunal. We raised this with the tribunal and it will take the necessary action."
Such issues usually arise in case of two or three products that come from Bangladesh to India, the report said.
Quoting Mr Ali it said these issues should be immediately resolved for both economic ties and for strong trade relations. "An immediate resolution will help further strengthen our regional cooperation," he also said about the appeal for the remedy placed Tuesday.
Bangladesh's move to approach the Indian tribunal came a few days after the Indian authority had decided to take bank guarantee for payment of anti-dumping duty from its imports against import of jute sacking cloths from Bangladesh.
Office of the deputy commissioners of customs on March 24 issued a circular to the all Indian importers of jute products to make sure bank guarantee at the highest rate of anti-dumping duty (ADD) until completion of investigation into an alleged circumvention of the anti-dumping duty imposed on export of jute sacking bags from Bangladesh.
"A bank guarantee on the said imports of Product Under Investigation (PUI) at the highest rate of ADD may be executed w.e.f 26.03.18, as a protective measure to safeguard the said duty element," the circular said.
Bangladeshi jute millers and jute-goods exporters expressed deep concern over such fresh move by the Indian government as they fear this measure will deal a further blow to their business.
They urged the government to take necessary negotiations and steps against such "irrational" decision by the neighbouring country.
Bangladeshi jute-goods exporters are already suffering due to the existing ADD imposed by India, they added.
The Indian authority has started to investigate an alleged circumvention of the anti-dumping duty imposed on export of jute sacking bags from Bangladesh.
Directorate General of Anti-Dumping and Allied Duties (DGAD) of the Indian commerce ministry last week issued a notification to launch such probe.
The DGAD has made the move following an application filed by the Indian Jute Mills Association alleging that Bangladesh has been exporting jute sacking cloths to avoid or circumvent the anti-dumping duty imposed on jute sacking bags, according to the notification.
However, on January 5th last, the finance ministry of India slapped anti-dumping duty ranging from US $19 to $351.72 per tonne on the imports of jute goods including jute yarn, twine, hessian fabrics and jute sacking bags for five years.
Among the items, jute sacking bag is facing the anti-dumping duty ranging from $126 to $138 a tonne. Jute sacking cloth was excluded from the ADD.
Circumvention of anti-dumping duty occurs when exporters adopt different techniques to avoid the duty levied on export of certain goods.
Exporters may modify the nature of goods to which anti-dumping duty is applicable, may export the item changing the harmonised system code and through other companies which are not facing the duty.
Asked about the latest developments on the bilateral trading front, Abdul Latif, assistant chief of Bangladesh Tariff Commission (BTC), said the DGAD started an investigation into circumvention of the anti-dumping duty that was imposed on export of Bangladeshi jute sacking bags.
If the investigation proves that no dumping happened in jute sacking-cloth import, then importers will get back the money which they will pay as ADD.
He said they will make the exporters aware so that any such circumvention can't happen.
Besides, he added, Dhaka has taken an initiative to file a review application with the Indian authority on the existing ADD imposed by Delhi.
"We have asked 26 private jute-goods exporters affected by the anti-dumping duty to submit supportive information and data by 31 March," he said about the next move.
The government also has a plan to raise the issue to the dispute- settlement body (DSB) of the World Trade Organisation (WTO) as per international trade regime.
On the other hand, following the imposition of anti-dumping duty, the jute-millers saw a decline in export of jute goods.
According to the Bangladesh Jute Spinners Association (BJSA), the shipment of jute yarn dropped to 74,000 tonnes in fiscal year 2016-17 from 100,000 tonnes the previous fiscal.
Bangladesh Jute Mills Association (BJMA) secretary Abdul Barik Khan said the overall export of jute goods to India fell significantly after the imposition of anti-dumping duty.
Because of imposition of ADD on jute cloth, the export earnings will fall further and many mills will be subjected to closure.
He requested the government to take effective measures in this regard.
Talking to the FE about the trade dispute, Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said the move taken by the Indian authority is very much disappointing.
"Bangladesh should seek solution from WTO to resolve this crisis," he said, adding that Bangladesh can seek explanation under the anti-dumping-related articles 3, 4 and 5 of the WTO.
It is also needed to examine whether Bangladeshi jute goods are being dumped in to the neighbouring country or not.
If dumping did occur, it is imperative to identify whether Indian industries are affected or not.
Tariff commission also should investigate if any dumping is happening in Bangladesh by other countries, the economist suggests.
"We have been suggesting for long days for such investigation. But we didn't see any fruitful initiative. But now time has come to take strict measures," he said.
A total of 170 jute mills are running under BJMA, 94 under Bangladesh Jute Spinners Association (BJSA) and 23 under Bangladesh Jute Mills Corporation (BJMC).
Bangladesh exports more than 0.8 million tonnes of jute goods across the globe. Of the total volume, 0.2 million to 0.25 million tonnes are destined for India, according to exporters.
Bangladesh's imports from India cost $6.16 billion in FY 2016-17, while its exports fetched only $672.40 million, central bank data showed.
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