India won\'t slap CVD on BD jute goods

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Syful Islam | Published: February 08, 2016 00:00:00 | Updated: February 01, 2018 00:00:00

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New Delhi has backtracked from a move to slap anti-subsidy or countervailing duty (CVD) on import of Bangladeshi jute goods after consultation with Dhaka, officials said.
Trade officials of the two countries debated over the issue last week in the Indian capital, as the next-door neighbour initiated a process for imposing the duty following requests from its jute goods producers, they added.
"We could successfully explain the reasons and necessity for providing subsidy on export of jute goods to our Indian counterparts. So, they have decided not to proceed with the move of slapping the duty," Ministry of Commerce (MoC) additional secretary and leader of the Bangladesh delegation Monoj Kumar Roy told the FE.
Other members of the Bangladesh delegation were: MoC joint secretary Nesar Ahmed, director of Department of Jute Mohammad Kefayet Ullah, joint chief of Bangladesh Tariff Commission Roma Dewan, and commercial counsellor of Bangladesh Embassy in New Delhi Dr Nahid Rashid.
Referring to his submission made in the meeting Mr Roy said jute is an environment-friendly agriculture item. There are many global initiatives, including providing incentives and subsidies, to promote the environment-friendly jute products. India is also providing subsidy to jute goods.
"Jute production is mostly dependent on nature's will. Its production can be seriously hampered because of natural calamity. Our farmers are still dependent on age-old technologies. So, we need to provide subsidy to jute and jute goods producers."
He said Bangladesh, being a least developed country (LDC), can provide subsidy to promote export of jute goods. This is in no way violation of any international law.  
"We've told the Indian side that Bangladesh has been providing subsidy for the last 20 years. It's an ongoing process, and has no new impact on Indian jute goods producers."
Mr Roy said according to the WTO (World Trade Organisation) agreement and the Indian Customs Tariff Act 1975, investigation on allegation of anti-subsidy and anti-dumping on same goods cannot be carried out simultaneously. Presently India is investigating anti-dumping allegation on Bangladeshi jute goods in its market.
The Indian Jute Mills Association in December alleged that the Government of Bangladesh (GoB) has been providing subsidy or cash incentives on export of jute goods, thus diminishing competitiveness of their domestic producers.
The association leaders also requested the Indian government to slap anti-subsidy or countervailing duty on import of jute goods from Bangladesh.
At present, Bangladeshi jute goods exporters get 7.5 per cent cash incentives as part of the government's move to boost overseas shipments.
However, steps are there to reduce the cash incentive in future, said another senior MoC official.
Bangladesh exported jute and jute goods worth US$ 868 million in the last fiscal year, 2014-15, of which $110 million went to India.
Meanwhile, Commerce Minister Tofail Ahmed told newsmen on Sunday that Bangladesh and India have been maintaining friendly relations for a long period.
He said some differences, one on anti-dumping and another on anti-subsidy on jute goods, will be over soon. Besides, the two nations are in talks for the removal of non-tariff barriers.
Mr Ahmed told these after a meeting with newly-appointed High Commissioner of India Harsh Vardhan Shringla at his secretariat office.   
"No situation has arisen between the two countries that we will make use of anti-dumping measure. We provide subsidy to our jute goods exporters, which India also does."
Mr Ahmed said the government will set up 100 economic zones in the country. Indian private sector is invited to invest in some of them.   
Mr Shringla told newsmen that bilateral trade between the countries has been gradually increasing, which will continue in future also.   
He said existing trade impediments between these two countries will be removed through discussion at different levels.
syful-islam@outlook.com