With Bangladesh blunting the edge of domestic jute manufacturers in the export market, the jute industry has urgently pitched for an external market assistance scheme.

The industry feels the scheme, pending with the Union textiles ministry for three years, can help increase its share of exports."The external market assistance scheme was suggested by the National Jute Board (NJB) and it is currently pending with the Union textiles ministry. In the absence of the scheme, we have been reduced to residual sellers in the global market. We are not in a position to compete with Bangladesh which offers 10% cash subsidy to its exporters", said Raghav Gupta, chairman, Indian Jute Mills Association (Ijma), the apex body of the industry.

Indian jute manufacturers ship around 0.2 million tonne of jute goods for the overseas market valued at Rs 2,000 crore. Bangladesh on the contrary, exports 0.8 million tonne of jute products worth Rs 5,000 crore. During 2013-14, no raw jute was exported from India while Bangladesh exported both raw jute and jute goods.

Besides threat from their counterparts in Bangladesh, the jute manufacturers were let down by political turmoil in major jute bags importing countries like Thailand and Syria that has led to loss of nearly 75,000 tonne of export demand.

Rising imports from Bangladesh was also a worrying factor. Under the SAARC treaty, there is no custom duty applicable on jute goods imports from Bangladesh, thereby creating a non-level playing field between jute bag manufacturers of India and Bangladesh.

The cash subsidy of 10% on jute goods exports from Bangladesh is also applicable to exports made to India. Under the SAARC treaty, there is zero duty on import of jute goods from Bangladesh. As a result, subsidised jute goods from Bangladesh is flooding the Indian market.

Ijma has called for imposition of a countervailing duty on imports of jute goods from Bangladesh, to the tune of subsidy extended by the Bangladesh government to ensure a level playing field for Indian jute bag manufacturers.

Source:- business-standard.com