India has initiated an investigation into the import of jute sacking cloth from Bangladesh. There are allegations this is being done to evade anti-dumping duty on jute sacking bags. India has an anti-dumping duty on jute yarn/twine, hessian fabric and jute sacking bags brought from Bangladesh and Nepal.

The investigation would look to determine the existence, degree and effect of the alleged circumvention by poring through trade data from October 2016 to December 2017 and examine the need to extend the existing duty to the circumventing product.

Until investigations wrap up, Indian importers of jute products have been instructed to give an undertaking of payment of duty if their consignment of sacking cloth is found to be circumventing the existing tariff.

Exports of jute products have declined after India imposed the anti-dumping duty on jute products from Bangladesh. As a result, mills are sitting on increased stockpiles of jute goods. Bangladesh’s exports of jute and jute goods to India fell 18 per cent year-on-year in the July-February period of this fiscal year. During the period, shipment of jute bags fell sharply while exports of jute sacking cloth soared.

India accounted for 15 per cent of Bangladesh's total export receipts from jute and jute goods in the first eight months of the fiscal year.