Indian government has moved closer to imposing anti-dumping duty (ADD) on import of jute sacking cloth from Bangladesh, as it has claimed to have evidence that the product is being dumped avoiding the duty on jute sacking bags.
Directorate general of Trade Remedies of the Indian commerce ministry on March 7, issued a disclosure statement of an investigation saying that export of the jute sacking cloth from Bangladesh eroded the effect of the ADD earlier imposed on jute bags.
DGTR initiated the probe in March last year for alleged circumvention of anti-dumping duty imposed on jute sacking bags.
Bangladesh commerce ministry officials and exporters feared that most of the local jute mills and traders would be hit hard if India imposed anti-dumping duty on export of jute sacking cloth.
Local exporters were supposed to provide their comments on the disclosure to DGTR by March 14, they said.
‘Bangladesh High Commission in India, however, has requested the DGTR for extending the deadline till March 31 for providing comments as more than 20 Bangladeshi companies are involved in this investigation,’ a senior commerce official told New Age on Thursday.
Commercial counsellor of Bangladesh High Commission to India AKM Atiqul Haque made the request to Indian investigation authorities arguing that sufficient time was required for preparing the submission on the investigation, he said.
India on January 5, 2017 imposed anti-dumping duty ranging from $19 to $351.72 a tonne on import of jute products including jute yarn, twine, hessian fabric and jute sacking bags from Bangladesh for five years.
Of the products, jute sacking bag is facing the anti-dumping duty ranging from $126 to $138 a tonne.
Jute sacking clothe fall outside the purview of the duty.
DGTR on March 20, 2018 initiated the anti-circumvention investigation regarding imports of jute sacking cloth, the penultimate form in the production of jute sacking bags, following an allegation of circumvention of anti-dumping duty on jute sacking bags.
Circumvention of anti-dumping duty occurs when exporters adopt different techniques to avoid the duty imposed on the export of certain goods.
Indian Jute Mills Association sought imposition of anti-dumping duty to jute sacking cloth alleging that Bangladesh has been exporting jute sacking cloth to avoid or circumvent the anti-dumping duty imposed on jute sacking bags.
Bangladeshi exporters during the hearing on the investigation denied the allegation saying that they did not change the pattern of trade to circumvent anti-dumping duty.
They were exporting the product to companies based on their demand and they were also not aware if the product—jute sacking cloth—is being converted into jute bags in India, they said.
Exporters also argued that the production and exports of the product were a result of the imposition of the anti-dumping duty since the product was exported prior to the original investigation, they said.
According to the disclosure, export of jute cloth has increased significantly while that of bags has fallen in similar rate after imposition of the duty on bags during the period of investigation between October 2016 and December 2017.
Export of cloth increased to 96 per cent in December 2017 from 3 per cent in December 2016 while export of bags dropped post imposition of ADD to 4 per cent in December 2017 from 97 per cent in December 2016, it said.
It found dumping margin ranging from 10-20 per cent for most companies while for few companies the rate is up to 60 per cent.
The process has eroded the efficacy of existing anti-dumping duty on sacking bags during the period of investigation by Rs 14,762 per tonne, it said.
Some companies including Asha Jute Industries, Mymensingh Jute Mills, Nawhata Jute Mills, Partex Jute Mills and Sidlaw Textiles did not circumvent the duty.
Bangladesh Jute Mills Association secretary Abdul Barik Khan on Saturday told New Age that they were informed about the disclosure.
BJMA members expressed apprehension that imposition of anti-dumping duty on jute sacking cloth would severely affect the sector, he said.
Following the request of some member mills, BJMA wrote a letter to Bangladesh commercial counsellor to New Delhi for taking effective steps on the issue, he said.
BJMA, however, has yet to receive the disclosure officially.
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