The increase in imports and rising operating costs are adversely affecting the jute industry. The industry is also unable to fully utilise its production capacity due to the fall in demand. The jute industry says that a large number of jobs have been lost due to this. This has also affected jute farmers who are struggling to sell their produce.
The jute industry of Bengal is facing difficulties these days due to the continuously decreasing demand for jute bags. Increase in imports and rising operating costs have also troubled the industry. According to the data of the Ministry of Commerce, there has been a huge decline in the demand of 38-39 lakh bales (500 bags in each bale) annually in 2021-22. It is expected to be 30 lakh bales in the financial year 2024-25.
The Indian Jute Mills Association (IJMA), the apex organization of jute mills in the country, has sought policy intervention from the central government to help the industry deal with other challenges including the falling demand for jute bags and its adverse effect on workers and farmers.
IJMA President Raghavendra Gupta said that the fall in demand has led to the capacity not being fully utilized, forcing the mills to cut shifts and shut down operations. This has resulted in large-scale job losses. This has also affected jute farmers, who are struggling to sell their produce at the minimum support price.
The jute industry is working at 55 percent capacity, affecting more than 50,000 workers. Bengal contributes about 70 percent to the country’s total jute production. The remaining 30 percent includes other states. There are a total of 94 jute mills in the country, of which 70 are in Bengal alone. In Bengal, 40 lakh jute farmers and four lakh workers are dependent on this industry.
Jute bags should also be used in packaging of imported wheat and rice
To boost demand, IJMA has urged the Centre that all imported wheat, whether through government deals or private trade, should be packed in jute bags as per the mandatory provisions of the JPM (Jute Packaging Material) Act, 1987.
It has also suggested to return to the use of new jute bags instead of second-hand bags for packaging paddy. Gupta said that at present, the use of 100 per cent and 20 per cent jute bags is mandatory for packaging food grains and sugar respectively, but in the case of sugar, this is also not being followed properly.
Demand for review of anti-dumping duty on jute products
IJMA has requested the government to review the anti-dumping duty (ADD) on jute products from Bangladesh and Nepal. Despite the existing anti-dumping duties, Bangladesh and Nepal still hold 55 per cent share in the non-government jute goods market, worth Rs 3,500 crore. Madan Gopal Maheshwari, president of the Jute Balers Association, says the industry contributes more than Rs 12,000 crore to the rural economy.