Why in News :
- In June 2025, India imposed a ban on import of jute products and woven fabrics from Bangladesh through all land routes, limiting entry only via Nhava Sheva seaport.
- The move comes amid:
- Circumvention of anti-dumping duties (ADD) by Bangladeshi exporters.
- Strategic realignment in South Asia with Bangladesh’s growing proximity to China.
- Protection of domestic jute farmers and industries in West Bengal, Bihar, Assam, and Odisha.
Key Issues Involved
Economic Impact:
- Rising imports despite ADD: From USD 117 million (2021-22) to USD 144 million (2023-24)
- Price crash below MSP: Farmers received less than Rs 5,000/quintal, while MSP was Rs 5,335.
- 6 jute mills shut, with over Rs. 1,400 crore in dues.
- Sector supports over 4 lakh workers and lakhs of farmers.
Trade Malpractices:
- Bangladesh continues state subsidies, violating fair trade.
- Circumvention of ADD through:
- Mis-declaration of goods
- Overstated production capacity
- Use of land routes to evade checks
Strategic Concerns: Import curbs also signal:
- Displeasure with Bangladesh-China strategic closeness.
- India’s stand on economic sovereignty and regional influence.
Policy Response
Imports now restricted to Nhava Sheva seaport for:
- Stricter quality control (e.g., hydrocarbon oil content).
- Tracking of source and product classification.
- Prevention of “grey routing” via third countries.
- DGFT notification excludes Nepal & Bhutan-bound consignments in transit.
Domestic Significance
- Supports revival of Indian jute sector, especially in eastern states.
- Restores price stability and demand for indigenous jute.
- Prevents market flooding by underpriced Bangladeshi products.
South Asia Trade Relations Angle
- SAFTA (South Asian Free Trade Area) previously allowed duty-free jute imports.
- India’s action could strain SAARC trade dynamics, unless Bangladesh addresses concerns.
Long-Term Outlook
Potential for:
- Extension of ADD to raw jute (currently exempt).
- Introduction of Jute Import Monitoring System (JIMS).
- Diplomatic re-engagement with Bangladesh on transparent trade norms.
Way Forward
- Strengthen institutional mechanisms like DGAD for swift ADD enforcement.
- Promote technology infusion and product diversification in the jute sector.
- Encourage eco-labelling and exports of Indian jute globally.
- Balance strategic autonomy with regional economic cooperation in South Asia.
| Anti-Dumping Duty (ADD) A protectionist tariff imposed on imports sold below fair market value (i.e., dumping).Dumping occurs when foreign exporters undercut prices to gain unfair access to a domestic market. Countervailing Duty (CVD) A type of import tax imposed to neutralize subsidies provided by foreign governments to their exporters. Aim: Protect domestic producers from unfair price advantages of subsidised imports. |
| UPSC Relevance GS Paper 2: Bilateral Relations, Trade Agreements, Regional Groupings GS Paper 3: Indian Economy, Agriculture, Manufacturing, MSMEs Possible Mains Question : Q.Evaluate the impact of subsidised imports on indigenous industries with reference to the Indian jute sector. |