Shadows loom over a fledgling industry here as New Delhi seeks duty privilege to export its Masterbatch goods to Bangladesh that suffers huge bilateral trade deficit.
Local entrepreneurs aired their concerns and also pointed out that India imposed anti-dumping duty on some Bangladeshi items while seeking duty waivers on theirs.
The Indian side has sought SAFTA or South Asian Free Trade Area tariff benefit in exporting Masterbatch goods, sources said.
India's product exports are at times subject to 15-percent Most-favoured Nation (MFN) duty.
The Indian High Commission in Dhaka has sent a Note Verbale to the foreign affairs ministry to take required action and look into the matter at the earliest.
The ministry has forwarded the note to the National Board of Revenue (NBR) for necessary step.
The note refers to the agreed minutes of the 14th Joint Group of Customs meeting held on 21-22 August 2023 regarding "Customs Duty in respect of Masterbatch products" wherein the Indian side stated that Masterbatch products (falling under 32061920) enjoy zero-rated duty under SAFTA but Masterbatch exports from India are at times subject to 15-percent MFN.
It has mentioned that the Bangladesh side had agreed to re-examine the SAFTA SRO for ensuring uniform implementation at its customs offices.
The info of export volume of Masterbatch from India to Bangladesh could not be found despite trying.
Local producers of Masterbatch say they are self-sufficient in production of such items and fear that possible dumping of such products may harm the domestic industry if the proposed duty facility is given.
The entrepreneurs here have urged the government not to give approval when they have enough capacity to meet the country's demand.
When contacted, a top executive of Bangladesh Plastic Goods Manufacturers & Exporters Association (BPGMEA) said, "Local entrepreneurs will be hurt if the facility is given for Indian Masterbatch. Besides, the growth of the sector would be affected badly."
If the request is accepted, it would be "suicidal" for the local industry, industry-insiders forewarned.
Masterbatch is a solid product, normally of plastic, rubber, or elastomer, in which pigments or additives are optimally dispersed at high concentration in a carrier material, according to wiktionary.
The carrier material is compatible with the main plastic in which it will be blended during molding, whereby the final plastic product obtains the colour or properties from the Masterbatch.
Currently, local producers produce all types of Masterbatch in the country. The industry made its debut in 2015.
But the local producers presently import a little amount of special Masterbatch from different countries, including China and India.
The domestic market size for plastic products is around Tk280 billion. Bangladeshi plastic companies now look to grab a sizeable share of the $560 billion global market, according to the BPGMEA.
Seven factories are manufacturing the goods in the country. The volume of local Masterbatch is around Tk 10 billion.
India imposes anti-dumping duty on Bangladeshi jute goods and fishing net, and local producers have long regretted the barrier and government authorities placed request with New Delhi for removing the restriction.
Bangladesh Plastic manufacturers import around 2.0 million tonnes of raw materials for using in their plastics units.
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