Trade officials from Dhaka will attend a consultation meeting in New Delhi tomorrow (Wednesday) as the government of India has moved to slap anti-subsidy or countervailing duty (CVD) on import of jute goods from Bangladesh, officials have said.
The Indian Jute Mills Association in mid-December last year alleged that the Government of Bangladesh (GoB) had been providing subsidy or cash incentives on export of jute goods which was 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.
A six-member delegation, headed by additional secretary of the Ministry of Commerce (MoC) Monoj Kumar Roy, will take part in the meeting. On the other hand, director general of allied-duties AK Bhalla will lead the Indian team in the meeting.
Mr Roy told the FE on Sunday that the GoB had been providing subsidy or cash incentives to make the exporters competitive not only in Indian market but also to all other export destinations.
"During the consultation, we will place forward the rationality of providing the facilities. Besides, we will show that the subsidy or cash incentives are being provided in line with international trade rules," he said.
Mr Roy said the Indian side will be asked to prove that its domestic industry is being affected only because of the subsidy or cash incentives being provided to Bangladeshi jute goods export. There may be other reasons behind their jute industry being affected, he said.
At present, Bangladeshi jute goods exporters get 7.5 per cent cash incentives as part of the government's move to boost overseas shipments.
Another senior MoC official said there is a great demand for Bangladeshi jute goods in India. Bangladesh's export will face difficulties and earnings from the sector will go down if India now slaps anti-subsidy or countervailing duty on jute goods import.
He said Bangladesh needs to explain the logic of providing the cash incentives or subsidy in a way which can prove that it is being done due to valid necessity and it doesn't violate global trade rules.
The Indian move to slap the countervailing duty has to be stopped at the negotiating table by providing appropriate logic, he added.
Earlier in October last, India launched an investigation into allegations of dumping jute goods and hydrogen peroxide (H2O2) from Bangladesh in its market without consultation.
In this case, New Delhi had turned down the request made by Dhaka to allow it consultation as per rules of SAFTA (South Asian Free Trade Area) agreement.
Bangladesh exported jute and jute goods worth US$ 868 million in the last fiscal year, of which $110 million went to India.
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