Wednesday | 15 January 2025 | Reg No- 06
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Wednesday | 15 January 2025 | Epaper

India's anti-dumping duty an unfair gesture to trade

Published : Tuesday, 31 January, 2017 at 12:00 AM  Count : 388
Haradhan Ganguly
Piles of jute and jute goods worth about taka hundred crores are kept stuck in port not finding way to India. The decision of Indian government to impose anti-dumping duties on Bangladeshi jute and jute goods came no less as a bolt from the blue. Indian government verdict of 5 January would cause a total halt to export of Bangladeshi jute and jute-made products to India which was used to be a good market Bangladesh. Anti-dumping duties ranging from $ 6.30 to $ 351.72 a tonne will apply to import of jute and jute products from Bangladesh for the next five years.
If exportable products somehow enjoy subsidy from the government, they could be prey to anti-dumping duties from importing countries to keep up their own products' competitive edge. Since prices of subsidized products are low comparing to those of importing countries which are not enjoying subsidy. At this local products lose their competitiveness to the imported subsidized products. Then imported countries take resort to imposing anti-dumping duties on subsidized imported of the same goods to revamp their own products' competitive edge. Indian Jute Mills Association accused Bangladeshi exporters, for the first time in forty years, of selling jute products at prices lower than that in India's domestic market. But according to media report, Dhaka Chamber of Commerce and Industry (DCCI) in an investigation said, "There is no clear finding of injury caused by Bangladesh's export price and volume to Indian local finished products. While the Indian market accounts for 20 percent of all Bangladeshi's exports of jute and jute made products, Bangladesh's jute exports to India is equivalent to only 8 percent of the entire Indian market share (Daily Star, 15 January 2017). So DCCI's argument is clear that our jute and jute goods exports to Indian market is too microscopic to manipulate prices there. Rather we say the proposed anti-dumping duty could result in adverse multiplier impacts on our local growers, producers, and exporters, and spur further trade imbalance with India which is already massive and of significant concern. Exports of jute and jute goods to India in the fiscal year (FY) 2015-16 grew by more than 150 per cent to $260.74 million from $ 104.51 million. Of the $260.74 million, $96.68 million came from raw jute, $86.93 million from jute yarn and twine and $57.71 million from jute sacks and bags.
No doubt, if the decision stands, the country is going to suffer badly. Many in the sector view the Indian move as an undesirable reaction to the bulging Bangladesh exports and that justifying the stand would be more than difficult if Bangladesh proceeds in right earnest.
Now what is dumping? In a simple way it could be said, if a company exports a product at a price lower than the price it normally charges on its domestic market, the act is termed dumping. In two ways it comes possible. First to make your neighbour poor- a revelation is prevailing in literature of international trade. Where exporting country charges lower price than its home market, even lower than cost of production to bring competitive edge in its favour in the importing country's market. Secondly it might happen when exporting country's product enjoys subsidy from the government. Then to protect local industry from uneven competition, importing country might take resort to imposing anti-dumping duty on the same goods imported from. But Indian importers and manufacturers of jute products themselves said in the past that quality of jute from Bangladesh was the best that they got to work with. The rationale behind that it was done for the sake of protecting Indian domestic jute producers is baseless as we said before. Since entrance of jute and jute goods in Indian markets from Bangladesh is so negligible comparing to Indian own total jute products. Media sources said, Indian businesses as recently as 2015, urged the authorities of both countries to allow Bangladeshi jute to enter the Indian market as it would help stabilize prices. Then why did the Indian authority decide to levy such hefty duties on Bangladeshi jute? A media source said, the jute products importers Association (JIPA) of India had even sent a letter to the commerce minister of Bangladesh on 28 January 2016, asking him to intervene and prevent the imposition of duties that may restrict the import of jute products from Bangladesh. Because the demand of jute goods in India is higher than supply and the gap is in fact met by the imports from Bangladesh. Here media quoted the saying of the joint secretary of JIPA, the real intention behind the move was to give 'a few Indian millers' the opportunity to create a monopoly market. Our concerned commerce ministry should immediately bring this matter on negotiating table with Indian partners. India must realize this anti-dumping duty will not help her economy from a holistic perspective. It is fact we do not have much experience in fighting anti-dumping moves. The most significant and indeed an unforgettably bitter one was that of the lead acid battery case. Concerned quarters mat well recall the arbitrary manner in which anti-dumping duties were levied on batteries at that time with total disregard to WTO provisions and still India did manage to stick to its stand for more than five years until finally reversed when Bangladesh moved the WTO's dispute settlement body. But we can retaliate the Indian anti-dumping duty. Indian threads are flooding our markets at cheap rates than that of our threads causing major damages to our spinning industry. For years this is going on. This is because Bangladesh does not have much experience in fighting anti-dumping move. But Indian anti-dumping duty on our jute and jute goods is an unfair gesture to our bilateral trade. Friendliness could not last in rhetoric; it is to be proved in works. In one hand, India allows the entrance of all most all exports with zero duty to her market for Bangladesh. On the other hand, mounting non-tariff barriers one after another is totally a contradictory scenario commensurate with giving all by one hand and snatching it away by another. We urge the government to look immediately to initiate talks with Indian government and try to address the matter quickly. The anti-dumping tax does seriously damage Bangladesh's vision for its own future. But it will also hurt India if we go for retaliation in trade one by one and set for other market sources.r
Haradhan Ganguly is Secretary, United Nations Association of Bangladesh (UNAB) and a freelance contributor. Email: gharadhan@gmail.com








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