India has imposed restrictions on the import of jute and jute goods from Bangladesh. This is likely to give Bangladesh’s jute sector a rough time. If the country’s jute mills cannot export the ordered goods immediately, they cannot pay salaries and bonuses to mill workers, which may create labor unrest. And if jute mills stop production, jute farmers may be deprived of fair prices during the peak season.

The jute industry in India has demanded imposition of a countervailing duty on imports of jute goods from Bangladesh. Under the SAARC treaty, there is zero duty on import of jute goods from Bangladesh. This, says the Indian jute industry, creates a non level playing field between jute manufacturers of India and Bangladesh. It says subsidised jute goods from Bangladesh are flooding the Indian market, hurting the interests of Indian jute manufacturers.

Indian manufacturers want an export incentive scheme, a level playing field vis-à-vis Bangladesh and an increase in duty drawback rates. They also want the use of jute geo-textiles to be expedited. This product has been found to be beneficial and cost effective in road construction, river bank protection as well as hill slope stabilisation.