The Indian Jute Mills Association (Ijma) has moved a proposal to the state government and the union textiles ministry for a ban on imports of all categories of jute goods including jute bags from Bangladesh.
According to top Ijma sources, the proposal for the ban has been communicated to the government in a letter dated October 12, 1998, addressed to the union textiles minister, Kashiram Rana.
The letter has sought the inclusion of imported jute goods from Bangladesh on the Banned List of import commodities.
The move to impose an embargo on imports has been prompted by industry apprehensions that cheap imports from Bangladesh would cause a demand glut in the domestic market. The alarm was sounded when a Calcutta-based firm bagged an order for import of jute B-Twill bags from Bangladesh.
Ijma sources said, since Bangladesh is also a Saarc country like India and it is allowed to export to India at concessional duty rates that are allowed to all inter-trading Saarc countries. "This works out to a situation where, the landed price of these B-Twill bag imports from Bangladesh would be Rs 20,500 per tonne which is well below the ruling market price in Calcutta," sources said.
This is just one instance of how the domestic market for jute goods would suffer if these imports are allowed, they added.
Apart from India, Bangladesh is the only exporter of jute goods in the world. While India and Bangladesh are already fierce competitors in the global exports market, Bangladesh's attempt to enter Indian markets could spell ruin for domestic players, sources said.
The opposition by the domestic industry has been further fuelled by the fact that these imports would cut into an already shrinking market. The domestic jute demand has been stagnating with the traditional consuming sectors like cement and fertilisers switching preferences to synthetic packaging materials.
The government remains the biggest purchaser of jute bags for the food grain sector, but most of the private sector markets have shifted to synthetic packaging materials. The market will face further pressure if the mandatory jute packaging order, with regard to the cement, fertiliser and sugar sectors, is diluted as per the recommendations of the parliamentary Standing Advisory Committee (SAC).
Jute goods manufacturers have also been under pressure to modernise their units in a bid to reduce their cost of production. High labour and raw jute costs have kept market realisations under pressure in addition to a declining demand trend. Diversification efforts by most jute mills have also not gathered much momentum and therefore exports of diversified products have not been as spectacular as expected.
