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Wednesday | 15 January 2025 | Epaper

New Year's hope for Bangladesh-India economic relationship

Published : Wednesday, 3 January, 2018 at 12:00 AM  Count : 644
Haradhan Ganguly
Nearly hundred percent waiver of duty or duty free entrance of our exports to India is a unique ovation of real friendliness that grew through bondage of stinted blood during our Liberation War. Its unique contribution to our infrastructural development particularly to railway sectors by line credit is reflecting the essence of political goodwill for meaning of maintaining cooperation.
But to utter dismay when we often see India's prone to imposing non-tariff barrier in many ways on our exports make us fall in a sea of uncertainty. As if giving bounty from one hand and snatching away by other. Last example is our jute goods export. A significant portion of our jute goods are exported to India.
In recent time India all of a sudden imposed anti-dumping duty on our jute goods. As a result the overall export of jute goods to India has fallen significantly. According to the Bangladesh Jute Spinners Association (BJSA), the shipment of jute yarn dropped to 74000 tonnes in fiscal year2016-17 from 1lakh tonnes the previous fiscal year.
We know, our jute has regained its previous position. It is now shining in our exports again and possibility is there to capture the space after apparel. India was a big market for our jute goods. Huge quantity of jute yarn was stuck in Benapole border due to imposition of Indian anti-dumping duty.
The sudden Indian importers' decision dropped our exporters from the blue and threw them in a complete uncertainty. Unsold piling up of yarn compelled a large number jute yarn mills to stop. We know a huge trade gap between Bangladesh and India is prevailing.
According to Bangladesh Bank data, Bangladesh's imports from India were valued at USD 6.16 billion in FY 2016-17. While its exports stood at USD 672.40 million. Bangladesh exports 25 to 30 percent of its exportable jute goods to India with BJMC having the largest share in the export. India is a big economy. In the name of saving her local jute industries, she could lax her imposing anti-dumping duty arguments.
Let us hope, let the New Year be started with India's commitment to have a wonderful relation with Bangladesh beyond rhetoric in the true sense. Here demands the withdrawal of anti- dumping duty on jute items, though there are other things to be fulfilled as the pre-condition of having an effective relation.
If a country exports a product at a price that is lower than the price it normally charges in its local markets or sells at a price that does not meet its full cost of production, it is said to be "dumping" the product.  
Anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes are priced below fair market value (that is price in exporting country). Under the WTO agreement on Anti-dumping, members are authorized to impose specific anti-dumping duty when dumping causes or threatens to cause material injury to a domestic industry or materially retard the establishment of a domestic industry.
On 5th January 2016, the finance ministry of India slapped the anti-dumping duty ranging from USD 19 to 351.72 per tonne on the import of jute goods for five years. Indian Jute Mills Association (IJMA) filed an application to the designated authority, that is Directorate of Anti-Dumping and Allied Duties (DGAD), Ministry of Commerce, India for initiation of an anti-dumping investigation and imposition of anti-dumping duty on the imports of " Jute Products" from Bangladesh.
The DGAD sent a questionnaire to 258 exporters including government jute mills in Bangladesh but only 26 of them responded to the questionnaire. Of these, 11 jute mills faced different anti-dumping duties on their products on mill-basis.
In global trade arena, the tariff protection mechanism practiced the importing countries are losing its attraction due to bilateral, regional and plurilateral trade liberalizing agreements. Due to WTO disciplines and member's schedule of tariff commitments, raising tariffs (beyond allowable limits in WTO) to protect domestic industry is difficult. As such, protectionism in trade is now applied using Non tariff measures ( NTMs), Non-tariff barriers ( NTBs), and other trade remedies such as, Anti- dumping, Countervailing and safeguards.
Exporting firms did not respond to Indian queries faced higher duties. DGAD did not find any evidence of dumping in the case of two jute mills. Now Dhaka has decided to formally request Delhi to review the anti-dumping duty it imposed on the import of Bangladeshi jute goods.
To this end , Bangladesh Tariff Commission ( BTC) asked 26 private jute goods exporters affected by the anti-dumping duty to submit supportive information and data by January 4,2018. BTC sought the information as per requirement of the DGAD, though two year's wait is necessary after imposing of anti-dumping duty for submitting required documents.
Considering the given strength of the economy, India in no way could think to be threatened in competitiveness from Bangladesh. Her jute mills need not to be protected from our side. Since our jute mills are not getting any subsidy from government. So dumping in internal markets is not possible for local entrepreneurs of jute industries. Rather Indian anti-dumping duty made many spinning mills closed stretching the queue of unemployment.
But not only India, other importing countries might take resort to anti-dumping duty on our exports. Since they are also members of WTO. So, the major challenges for our exporters are their lack of awareness on the issue, lack of capacity to effectively handle complex dumping investigation and their insensitivity towards such measures.
Our exporters and as well as the competent authority do not have any experience on this. Both the regulatory authorities and  business enterprises have to enhance their understanding  and maintain comprehensive accounts to deal with anti-dumping cases in line with the WTO rules. The trade bodies, chambers of commerce and other stakeholders can play a vital role in supporting individual exporters in facing dumping investigation.
Now will India respond to our call of New Year speedily?

The writer is a freelance contributor, and can be reached at gharadhan@ gmail.com






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