Bangladesh is now weighing two Indian proposals for either providing 'price undertaking' or stopping subsidies in order to get anti-dumping duty on jute goods withdrawn, officials say.
Price undertaking by an exporter is an agreement to raise the export price of products to satisfy the authority of importing counties that the goods are not dumped there.
The two proposals came verbally, though stakeholders did not accept it.
Several rounds of bilateral meetings and requests during the last four years failed to pursue the Indian authority to withdraw the duty, which has been "seriously" hampering export of jute items to the Indian market.
A bilateral foreign office consultation, held late last month, was also proved to be futile, officials said. At the meeting, the Indian officials told their Bangladeshi counterparts the anti-dumping duty is a quasi-judicial matter and they are unable to make a decision on it.
In January 2017, India slapped the anti-dumping duty on Bangladesh's jute yarn, hessian and bags, ranging from US$19 to $352 per tonne, citing the dumping issue.
A senior trade official in Dhaka said Bangladesh provides subsidies for jute goods exports at the rate of 7.0 per cent on yarn and 12 per cent on bags and fabrics, mainly to keep the sector afloat. Otherwise, he said, Bangladeshi jute goods would not be able to compete in the international market.
He insisted the subsidy is offered in line with the World Trade Organisation's provision meant for the least-developed countries.
Another trade official said the ministry of commerce is now awaiting response from the Indian side for another round of discussion for the withdrawal of the anti-dumping duty.
The issue will also be placed at the bilateral commerce secretary level meeting scheduled for later this month.
President of the Bangladesh Jute Goods Exporters' Association (BJGEA) M Sajjad Hussain Sohel told the FE this type of undertaking means Bangladeshi exporters are accepting that they are dumping the goods in the Indian market.
"But the reality is not that. We are not dumping jute goods there in anyway," he said.
He said Bangladesh ships jute goods to India where price varies on quality, making it difficult for the exporters to provide the undertaking for every item and change it in each consignment.
"Price fluctuates very often depending on the demand and supply," he said.
Mr Sohel said Bangladesh's jute sector is facing serious ups and downs and without subsidy, it will not be possible on its part to sustain it.
"If the government withdraws subsidy for the Indian market, other countries will seek the same, eroding our competitiveness," he said, adding the Indian market accounts for 12 per cent Bangladesh's jute goods export.
"The proposals are not acceptable," he said.
Research director of Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem told the FE on Friday the allegation first emerged following the shipment of some consignments of jute goods by some state-owned mills.
"Since the public sector mills are already closed, there is no chance of the recurrence of such events," he said.
Mr Moazzem said Bangladesh has the right to provide subsidies in line with the facilities entitled to the least-developed countries.
"If Bangladesh makes the commitment to a particular country, other countries may push for it," he said.
He argued that Bangladesh could examine the two new Indian proposals, but should not bring those under any legal framework and keep close watch on the exporters to avoid any possible dumping.
syful-islam@outlook.com