Jute goods export faces setback as India slaps 4.0 pc CVD

Yasir Wardad Export of jute products to India faces a major setback as India has imposed four per cent countervailing duty (CVD) on Bangladesh's exports recently, business leaders said. "The Indian government imposed four per cent CVD on our jute products on October 11. Importers of Bangladeshi jute products in India were told to pay the duty", Bangladesh Jute Spinners Association (BJSA) chairman Mohammad Shams-uz-Zoha said. "The Indian businesses are being forced to stop importing the products from Bangladesh," he said. Talking to the FE he said, "The Indian government first imposed the duty on January 18 this year and withdrew it for an indefinite period after a meeting held with the commerce secretary of Bangladesh on January 26". He said, "But without any prior discussion with Bangladesh government India re-imposed the tax suddenly on jute yarn and twine." BJSA data showed that the country exported 25,000 tonnes of jute yarn in 2010 which jumped to 35,000 tonnes in 2011. Industry insiders claimed that local jute industries in India are playing the key role to stop Bangladeshi jute goods import. The export of jute products in India is increasing for its quality and durability, they said. A high official of the state- run Bangladesh Jute Mills Corporation (BJMC) told the FE that for the massive devaluation of Indian rupee against US dollar in August this year, many importers of India stopped taking their ordered jute products from Bangladesh. He informed that Indian importers ordered products worth nearly Tk 3.5 billion in August from BJMC, but they failed to buy one third of the order till date. "Later they began to purchase in Euro instead of dollar according to our suggestions", he said. "The Indian government prefers only raw jute and discourages import of value added products," he commented. "The latest CVD will discourage the Indian importers to import Bangladeshi jute goods," he added. Former chairman of Bangladesh Jute Mills Association (BJMA) Mr Nurul Islam Patwary told the FE that though the Indian government talks of reducing trade gap between the two neighbours, its activity doesn't reflect the intention. Mr Patwary, also managing director of Sonali Aansh Ltd said, "Bangladesh government should immediately start talks on the matter and solve the problem with the neighbouring country to protect the export trend." Bangladesh Bank and Export Promotion Bureau data showed that the trade gap between India and Bangladesh were more than double in last five years from $1.998 billion in 2006-07 FY to $4.057 billion in 2010-11 FY. BJSA former chairman Mr Ahmed Hossain told the FE that our major jute goods market in Middle-East and North Africa is facing a setback amid political turmoil in those areas. He said, "The price of jute yarn dropped by $350 to $400 per tonne globally when our last hope was India and China". "But the sudden CVD by India on Bangladeshi jute products will severely affect the industry."