India has launched an anti-dumping investigation into imports of jute goods from Bangladesh to see whether export prices are set below fair market prices. The probe is part of India’s plan to impose an anti-dumping duty on jute items imported from Bangladesh.

Bangladesh fears that if India imposes an anti-dumping tariff on Bangladeshi jute goods, this could deal a heavy blow to Bangladeshi millers and exporters and further widen the already huge trade gap between the two countries. Anti-dumping tariff is a penalty imposed on suspiciously low-priced imports, to increase their price in the importing country to protect local industry from unfair competition.

Bangladesh exports jute goods like yarn, twine, sacks and bags. Of the total exports, around 20 per cent goes to India. Other major destinations for Bangladeshi jute items are Turkey, Iran, Egypt, China and the US.

The country gives a cash incentive to encourage jute production and exports, but the cash incentive is decreasing gradually. At present, it stands at five per cent for yarn and 7.5 per cent for other jute goods. The Bangladesh jute industry feels if the anti-dumping duty is imposed, Indian consumers will suffer and will be forced to use plastic bags.