Bangladesh has announced incentives for jute exports to India.However jute mills in India are not amused. They are planning to file an anti dumping case. They feel such subsidized exports to India from Bangladesh will hurt the Indian market.

Bangladesh has been offering 10 per cent export subsidy on all jute products. The country’s jute mills and exporters receive 40 per cent and 20 per cent of their fund requirement, respectively, from government banks. Also, China is collaborating with the Bangladesh government to fund modernising initiatives for 23 jute mills.

Meanwhile, Indian jute exporters are facing stiff competition. During the April-September period this year, the volume of exports fell 11 per cent compared to the year-ago period. In recent months, exports have fallen due to higher exports by Bangladesh and instability in West Asia, a major market for Indian jute exporters.

Indian mills say imported jute bags and jute cloth are being used to package food grains, a violation of the Jute Packaging Materials  Act , 1987. Between April and August this year, the import of jute yarn and twine increased 65 per cent year-on-year. Import of jute bags was up 28 per cent and jute cloth and related products seven per cent.