2 years ago

India may lift anti-dumping duty on Bangladeshi jute exports

Announcement likely during PM's Delhi visit in Sept

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India is likely to remove anti-dumping duty on Bangladeshi jute-goods export next month over five years after the bigger trade partner had slapped the levy to plug the fibre shipments.

The announcement may come during the New Delhi visit of Prime Minister Sheikh Hasina in the first week of September, officials say.

Delhi informed Dhaka of such thinking late last month when Bangladesh High Commissioner to India Muhammad Imran called on Indian commerce secretary B V R Subrahmanyam to discuss bilateral trade issues ahead of the prime minister's trip.

"The commerce secretary indicated that anti-dumping duty on jute would be removed before the VVIP visit and be reflected in the joint statement as a deliverable," an official of the high commission informed foreign ministry this week.

India imposed the anti-dumping duty on Bangladesh's jute yarn, hessian and bags, ranging between US$19 and $352 per tonne, in January 2017, resulting in further widening of trade gap between the two next-door neighbours.

Bangladesh's overall annual exports to India amount to nearly $1.0 billion against imports worth some $10 billion in the two-way trade.

The regulatory duty on grounds of checking the 'dumping' of the product had an immediate impact on Bangladesh's jute-and jute-goods export to India and the trade declined in the following year.

In fiscal year 2018-19, overall exports from Bangladesh declined to $816.27 million from $1.085 billion in the previous fiscal.

Since then, Bangladesh had requested India to withdraw the anti-dumping duty as it seriously undercuts jute-and jute-goods export to the Indian market. However, the repeated requests on various occasions at different levels of the governments didn't yield any outcome.

At one stage, Bangladesh warned to raise the issue to the World Trade Organisation (WTO) for settlement of the trade dispute.

On the other hand, India in June last year launched sunset review of the anti-dumping duty, being requested by its local jute millers as the tenure of the duty imposition was supposed to be over in January 2022.

To have the anti-dumping duty on one of the main exportable from here lifted, Commerce Minister Tipu Munshi this March wrote to his Indian counterpart Piyush Goyal and Finance Minister AHM Mustafa Kamal to his Indian counterpart Nirmala Sitharaman in June.

Again, India levied the anti-dumping duty on export of hydrogen peroxide from Bangladesh, ranging between $27.81 and $91.47 per tonne, on April 2017. One year later, India also put anti-dumping duty, amounting to $2.69 per kilogramme, on fishing-net export from Bangladesh to its market.

Last month, the Indian commerce ministry recommended imposition of anti-dumping duty on clear-float glass export from Bangladesh.

However, in June this year, India withdrew the preventive duty on export of hydrogen peroxide there from here.

Commerce secretary Tapan Kanti Ghosh could not be reached for comment on the latest developments, despite repeated attempts.

However, Director-General of the WTO Cell at the ministry of commerce Hafizur Rahman told the FE there was no concrete development from the Indian side over the anti-dumping duties on jute and other products so far, which they imposed without following proper rules.

He said during the Prime Minister's Delhi visit next month, Bangladesh side will keep the issue as an item of agenda for discussion.

"Let's see what happens," says Mr Rahman, who had been handling the matter for long to clear the roadblocks.

However, he says the commerce secretary is on positive side to remove the barrier but the problem is Indian bureaucracy has differences of opinion that delays many things.

Research Director at the Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem told the FE that the indication of withdrawal of anti-dumping duty on Bangladesh's jute goods is positive news.

However, it needs to be explored under what regulatory arrangement the duty will be withdrawn as the Indian government earlier had indicated a legal barrier in case of withdrawal of the duty on jute goods as the decision on a petition is pending with Indian court on this matter.

"It is expected that the issue will be resolved through the court procedure in order to avoid any future complexities," says Mr Moazzem.

He pleads that the Indian government should take necessary measures for lifting the anti-dumping duty on other Bangladesh products, too, which are currently facing the same barrier like clear-float glass and fishing net.

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