Jute Commissioner scraps import licenses

Mills were illegally importing jute bags from Bangladesh, for packing sugar and food grains

The Jute Commissioner has scrapped the existing import licenses of all 77 jute mills across the country amid rising imports from Bangladesh.

Jute mills used to illegally import jute bags from Bangladesh, for packing sugar and food grains, violating the provisions of Jute Packaging Materials Act (JPMA), 1987. According to the Act, only jute and jute goods produced in the country can be supplied to the government for packing food grains and sugar in each agriculture season.

The Jute Commissioner has issued a three page mandatory 'declaration form' to be filled by jute mills wanting to import raw jute and jute goods. The jute mills will have to declare on the utility of the imported bags. From now on, the Jute Commissioner will issue a no-objection certificate (NOC) for imports.

"It is a welcome step. The Jute Commissioner has only followed the directive of the Government of India. According to the JPMA Act, only jute produced within the country can be used for making jute bags", said Sanjay Kajaria, managing director, Hastings Jute Mill and former chairman, Indian Jute Mills Association (IJMA).

In 2014-15, import of jute bags surged by 75% on value terms and 79% by volume terms. Of this, jute sacks went up by 36%, jute yarn by 37% and CBC (carpet backing cloth) by 27%.

In July this year, import of raw jute from Bangladesh surged by 213% on volume and 274% in value terms over the same month of last fiscal . Also, import of jute products rose by five% in quantity and moved up by 23% in value terms compared to July 2014.

Cumulative imports of raw jute during April-July 2015 declined by 21% in volume but rose six% in value terms over the corresponding period of last fiscal. Likewise, import of jute products in the period declined 26% in quantity but increased by four% terms in value terms.

Jute mills imported 30224 tonne of raw jute from Bangladesh in April-July period of this fiscal valued at Rs 11.43 lakh.

It is cheaper to import jute goods from Bangladesh and Nepal as labour cost and production costs are higher in India. Bangladesh production costs are cheaper by 30% in comparison to India. Nepal is used as a conduit for third party illegal imports.

More than four million farmers cultivate raw jute on 0.93 million hectares of land. The country produces 1.1 million bales of jute (one bale is 180 kg) every year. Out of the total of 113 commodities produced, raw jute is one of the 43 commodities notified for futures trading at the four national exchanges and six commodity specific exchanges.