Bangladesh has protested the imposition of non-tariff (NT) barriers on the sale of its jute bags in India. It has approached the Ministry of External Affairs (MEA), requesting the ministry to allow it to obtain a level playing with Indian jute goods through the lifting of the barrier.
These include mandatory labelling of its jute goods as ‘Made in Bangladesh’ when to be sold in the Indian market. Bangladesh says Indian jute bags entering its markets do not carry such labels and no such compulsory requirement has been made by it.
India’s jute commissioner denies this. “All bags manufactured and exported from India compulsorily carry labels of ‘Manufactured in India’ as per BIS (Bureau of Indian Standards) specification and government notification,” said Binod Kispotta, the commissioner.
The Government of India had imposed a second NT barrier by issuing a jute-batching oil order, which said jute bags entering the Indian market should not carry oil content (non-halogenated hydrocarbon) of more than three per cent. It was found that jute bags entering the Indian markets from Bangladesh have oil content greater than six per cent. The labelling and batch oil NT barriers were imposed in 2001.
The barriers were imposed to protect the domestic jute industry from Bangladesh imports and to also adjust to the Jute Packaging Materials Act of 1987. This law says foodgrain and sugar produced in India will have to be packed in jute bags manufactured in this country from the raw jute produced in India.
Bangladesh has complained that the NT barrier of compulsory labelling is resulting in a loss, as its production costs have gone up by three per cent and has rendered its products uncompetitive in the Indian markets.
Responds India’s jute commissioner: “Unlike Bangladesh, Indian jute goods exporters do not get a cash subsidy of 10 per cent from the Government of India.”
Adds an official of the Indian Jute Mills Association: “The price of labelling in India is only 0.44 per cent of the total bag price. It is really surprising as to how it could be as high as three per cent in case of Bangladesh.”
The bulk of India’s import of jute goods, of around 300,000 tonnes, comes from Bangladesh. In the export market, Bangladesh commands an upper hand over India because of price discounts.
