Calcutta, Oct. 23: The directorate general of anti-dumping and allied duties (DGAD), under the commerce ministry, has recommended an anti-dumping duty on certain jute products from Bangladesh and Nepal.

The suggestion follows an investigation based on a petition by industry body Indian Jute Mills Association (Ijma).

According to industry sources, Ijma in its petition to the DGAD last year had pointed out that producers in Bangladesh were exporting jute products at a price lower than the rate in their own country, helped by a 10 per cent cash subsidy.

Jute imports are allowed under the open general licence under which there are no restrictions. So, the low price imports were hurting the domestic industry.

A total of 17 petitioners, with a market share of around 42 per cent, have provided information to the DGAD as part of the investigation on the extent of the impact on account of the dumping.

After the investigation, the DGAD noted in its report, "There has been a significant increase in dumped imports in absolute terms and in relation to production and consumption in India. Imports have undercut the prices of the domestic industry. Whereas both the cost of production and the selling price has increased over the period, the increase in the cost of production was more than the selling price. Imports were, thus, suppressing prices of the domestic industry, leading to deterioration of profits."

The extent of the impact on the domestic industry is seen at 10-55 per cent depending on the product.

Suggested levy

The DGAD recommended a duty of $19.30-$351.72 a tonne on jute products from Bangladesh and $8.18-$38.90 a tonne from Nepal. The products include yarn, hessian fabric and sacking bags.

The DGAD further said in its report that the purpose of the anti-dumping duty was to eliminate the harm caused to the domestic industry by the unfair trade practices and re-establish an open and fair competition in the Indian market.

"The imposition of anti-dumping measures is not to restrict imports from the subject countries in any way and affect the availability of the products to the consumers. Consumers can still maintain two or more sources of supply," the report said.

"The DGAD investigation reveals that the industry has suffered from dumped jute products. The performance of the industry has deteriorated in terms of profit, return on investment and the mills are suffering from cash losses," said an industry source.