New Delhi re-quantifies anti-dumping duties on Bangladeshi and Nepali jute, extends the levy to sacking cloth, and leaves two of South Asia’s most fragile export industries fighting for survival.
NEW DELHI, September 28, 2026
India’s Department of Revenue has re-quantified the anti-dumping duties applied to jute products from Bangladesh and Nepal, replacing a broad tariff structure with producer-specific rates and extending the levy on jute sacking bags to cover jute sacking cloth.
The measure was given effect by Notification No. 24/2026-Customs (ADD), dated September 24, 2026, and follows a mid-term review completed on June 25, 2026. It was reported across South Asian trade press on Sunday and Monday, and it lands on two export industries that have spent three years arguing that Indian trade remedies are pushing them toward closure.
The duties apply to goods falling under tariff headings 5307, 5310, 5607 and 6305, covering jute yarn and twine in single and multi-folded form, hessian fabric, jute sacking bags and, now, jute sacking cloth. Rates for Bangladeshi producers range from nil to 445 dollars per metric tonne depending on the product and the manufacturer. Rates for Nepali producers range from nil to 292 dollars per metric tonne. Producers not individually named face residual rates of between 88 and 445 dollars per metric tonne.
The extension to sacking cloth carries an exemption for ten specified Bangladeshi producers, and a further exemption applies where an importer uses the goods for purposes other than manufacturing bags and complies with concessional import duty procedures.
The shape of the measure
The re-quantification is technically a refinement rather than a new imposition, and that distinction matters both legally and commercially.
India has maintained anti-dumping duties on jute products from Bangladesh and Nepal since 2017, following a determination that dumped imports were injuring the Indian jute industry, which is concentrated in West Bengal and employs a workforce measured in the hundreds of thousands across mills and the farming base that supplies them. The duties were extended following a sunset review and have been reviewed periodically since.
What the September notification does is convert a structure that applied broader categories into one that assigns rates producer by producer and product by product. A.M. Jute Industries of Bangladesh, for example, receives a nil rate. Super Jute Mills Limited faces rates in the range of 139 to 155 dollars per tonne depending on product. Arihant Multi-Fibres of Nepal receives nil on yarn but 56 dollars per tonne on hessian fabric.
That granularity is characteristic of a mid-term review, in which the investigating authority reassesses the dumping margins of individual exporters on the basis of updated data. Producers that cooperated fully and whose current pricing no longer shows dumping can emerge with rates reduced or eliminated. Those that did not cooperate, or whose margins persisted, do not.
The commercially significant change is the extension of the sacking bag duty to sacking cloth. Sacking cloth is the woven fabric from which sacking bags are made. Where a duty applies to the finished bag but not to the cloth, the obvious commercial response is to export cloth and complete the conversion inside the importing market. The extension closes that route, with carve-outs for the ten named Bangladeshi producers and for importers who can demonstrate that the cloth is not destined for bag manufacture.
Why this matters more in Dhaka and Kathmandu than in Delhi
For India, jute anti-dumping duties are a modest file in a large trade remedy programme. For Bangladesh and Nepal they are close to existential for a specific industry.
Jute is one of the few manufactured export categories in which Bangladesh competes on the basis of a domestic raw material rather than imported inputs, and India is the natural market: adjacent, large, and with an established demand for jute packaging supported by India’s own statutory reservation of foodgrain and sugar packaging for jute sacks. Losing preferential access to that market does not simply reduce margins. It removes the destination.
Nepali producers have made the same argument in sharper terms. Nepal is a least developed country, landlocked, with India accounting for more than sixty percent of its total trade. Bilateral trade reached more than 1.46 trillion Nepali rupees in the last fiscal year, with the trade deficit widening to 951.95 billion rupees. In that relationship, Indian trade remedies are not one factor among many. They determine whether particular Nepali industries exist.
Nepali coverage of the re-quantification has been stark. Reporting in Kathmandu this month has described the jute industry as facing collapse and characterised the duty change as a quadrupling of the effective rate to around 16 percent on an ad valorem basis for affected products.
The jute file also sits alongside a steel file that has already produced measurable damage. India imposed a three-year safeguard duty of between 11 and 12 percent on selected steel products in December, applying to imports from China, Vietnam and Nepal, set at 12 percent in year one, 11.5 percent in year two and 11 percent in year three. Nepal’s iron and steel exports fell 62.43 percent in the last fiscal year, to 6.14 billion rupees from 16.35 billion rupees, a loss of more than 10 billion rupees in export earnings according to the Trade and Export Promotion Centre.
The diplomatic track
The jute duties were on the table at the Nepal-India Inter-Governmental Sub-Committee on Trade, Transit and Cooperation to Combat Unauthorised Trade, which concluded a two-day meeting in New Delhi on September 17.
Nepal’s delegation was led by Buddha Bahadur Gurung, joint secretary at the Ministry of Industry, Commerce and Supplies. The Indian side was led by Ujjwal Kumar Ghosh, joint secretary at the Department of Commerce. Nepal made what its ministry described as a special request that India remove obstacles to the export of jute and steel products.
India’s response, as relayed by Gurung, was procedural rather than political. The Indian side clarified that trade remedy measures are governed by statutory and quasi-judicial investigative processes, and sought all relevant information from Nepal for consideration by the Directorate General of Trade Remedies.
“It will require further technical discussion bilaterally to move ahead,” Gurung told the Kathmandu Post. “Both sides discussed conducting joint technical meetings in different phases to move forward. It might take time to resolve the obstacles.”
That answer is legally correct and commercially cold. Anti-dumping and safeguard determinations in India are made by an investigating authority applying evidentiary tests, not by ministers responding to diplomatic requests. A partner country that wants a measure changed has to participate in the investigation and put evidence on the record, which requires technical capacity that smaller exporting economies often lack.
The meeting did produce one structural outcome. According to Gurung, it opened the door to a review of the Nepal-India Trade Treaty, with a technical committee to be formed within six months and both sides exchanging nominations to identify issues requiring revision. That is a longer game than the jute exporters can play, but it is the only game with a prospect of changing the framework rather than individual measures.
Separately, Nepali manufacturers have reported that Indian Bureau of Standards certification renewals have been held up. Sunil Manot, chief finance officer of Hulas Steel Industries, one of Nepal’s largest steel manufacturers, said the company’s certificate expired in June and its renewal application had been put on hold, cutting the factory’s capacity utilisation to 20 percent.
The Indian case
The Indian position rests on a domestic industry with a distinctive political weight.
The Indian jute sector is concentrated in West Bengal and supports a large agricultural base of jute growers alongside mill employment. It has been in structural decline for decades as synthetic packaging displaced natural fibre, and it survives substantially on the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, which reserves a proportion of foodgrain and sugar packaging for jute sacks. That reservation creates guaranteed demand, and the anti-dumping duties protect the domestic share of that guaranteed demand from imported supply.
Indian manufacturers have argued consistently that imports from Bangladesh and Nepal, produced with their own raw material bases and lower labour costs, undercut Indian mills to a degree that the reserved market cannot absorb. The Directorate General of Trade Remedies has accepted versions of that argument in successive proceedings.
The producer-specific structure of the new notification is, on its own terms, a fairer instrument than a blanket rate. Exporters whose current pricing does not show dumping receive nil rates. That is how the system is supposed to work, and several Bangladeshi and Nepali producers have benefited from it.
How anti-dumping works on a natural fibre
Jute presents an unusually awkward case for the standard anti-dumping methodology, and the difficulty explains why this file has been reviewed so often.
An anti-dumping determination compares the export price to the normal value, ordinarily the price in the exporter’s home market or, where domestic sales are insufficient, a constructed value built from cost of production plus reasonable selling costs and profit. The margin between the two is the dumping margin, and the duty is set to remove it.
For a manufactured good with a stable input cost, that comparison is tractable. For jute it is not. The raw fibre is an agricultural commodity whose price swings with monsoon performance, acreage decisions and government procurement in both India and Bangladesh. Mills buy fibre seasonally and carry inventory across price cycles. A cost build-up constructed from one season’s purchase prices can look very different from one constructed from the next.
Bangladesh and Nepal both maintain policy interventions in the jute sector, including support to growers and, historically, export incentives. Where an investigating authority treats such interventions as distorting domestic prices, it may decline to use home market prices as normal value and construct the value instead, which typically produces a higher margin.
The result is a file where small methodological choices produce large differences in outcome, and where the same producer can move from a substantial rate to nil across a single review. The producer-specific spread in the September notification, from nil to 445 dollars per tonne within the same country and product headings, reflects exactly that sensitivity.
For exporters, the lesson is that the quality of the submission matters as much as the underlying commercial facts. A mill with clean, auditable cost records that map onto the authority’s preferred methodology will fare better than an equally competitive mill without them.
The packaging reservation behind the dispute
No account of this file makes sense without the Jute Packaging Materials Act, which is the structural fact that gives the Indian industry something worth protecting.
The legislation requires that a specified proportion of foodgrain and sugar be packed in jute sacks rather than synthetic alternatives. The reserved proportions are reviewed periodically by the Indian cabinet and have been set at or close to full reservation for foodgrain in recent years. The effect is to create a guaranteed demand base for jute sacking that is insulated from competition with woven polypropylene, which would otherwise have displaced it entirely on cost.
That guaranteed demand is procured largely through government agencies for public distribution and buffer stock operations. It is, in other words, a publicly created market, and the question of who supplies it is unavoidably political. Indian mills argue that a market created by Indian legislation to support Indian jute growers should not be supplied from abroad. Bangladeshi and Nepali exporters argue that the reservation is a demand instrument, not an origin instrument, and that once demand exists it should be met competitively.
The anti-dumping duties are how that argument has been settled in practice. They do not formally reserve the market by origin, because that would be inconsistent with India’s World Trade Organization obligations. They make foreign supply uncompetitive within it, which achieves a similar result through an instrument that is legally defensible.
Understanding this explains why the file resists diplomatic resolution. The duties are not an irritant that a friendly government could remove as a gesture. They are load-bearing for an industrial policy that a state government and a large rural constituency depend on.
Economic impact analysis
The effects divide along familiar lines but with unusually concentrated incidence.
For Bangladeshi and Nepali mills that received nil or low rates, the re-quantification is a substantial competitive advantage over compatriot mills that did not. Within each country the measure creates winners and losers, and the winners are the producers that engaged with the Indian process. That is an incentive structure worth noting: cooperation with a foreign investigating authority now has a directly measurable payoff.
For those facing rates at the upper end, a duty of 445 dollars per tonne on a product whose export price is measured in high hundreds of dollars per tonne is prohibitive. Those producers are effectively out of the Indian market for the affected lines.
The extension to sacking cloth removes the most obvious workaround and will redirect whatever trade was moving that way. Some of it will stop. Some will move to the ten exempt Bangladeshi producers, which concentrates the remaining trade in fewer hands.
For Indian buyers of jute packaging, principally the agencies and processors that pack foodgrain and sugar, the measure raises input costs at the margin and increases dependence on domestic mills whose capacity and reliability have been a recurring complaint. The reserved market means those buyers cannot switch to synthetic alternatives, so the cost is absorbed rather than avoided.
For the broader South Asian trade relationship, the cumulative effect of the jute and steel measures is a visible narrowing of the access that smaller neighbours enjoy to the region’s largest market. That has consequences beyond the affected sectors. It shapes how Nepal and Bangladesh weigh Indian offers on connectivity, energy and transit, and it strengthens the constituencies in both countries arguing for diversification toward China and toward the Gulf.
Implications for importers, exporters and supply chains
Several practical points follow.
Producer identity is now the determining variable. With rates ranging from nil to 445 dollars per tonne within the same product categories and the same countries of origin, an importer’s duty liability depends entirely on which mill produced the goods. Importers should verify the manufacturer named in the notification annexes rather than relying on the exporter or trading house on the invoice, and should ensure the correct identifier is declared at the time of import.
The sacking cloth extension requires a product-level review. Businesses importing jute fabric into India should determine whether their product falls within the extended scope, whether their supplier is among the ten exempt Bangladeshi producers, and whether the end-use exemption is available to them. The end-use route requires compliance with concessional import duty procedures, which carry their own documentation and bond requirements.
Exporters in Bangladesh and Nepal that received unfavourable rates have two realistic paths. The first is participation in the next review with better data. Mid-term and sunset reviews recur, and a producer that can demonstrate non-dumped pricing over the new period of investigation can have its rate revised. That requires accounting systems capable of supporting a cost build-up that an investigating authority will accept, which is a real constraint for smaller mills. The second is market diversification, which for jute means the European Union, the Middle East and Africa, each of which has its own access conditions and none of which offers India’s proximity or scale.
Buyers outside India should expect price effects. Jute capacity that cannot sell into India will look for other outlets, and the near-term consequence in third markets is downward price pressure on hessian, sacking and yarn. Buyers in Europe, the Gulf and Africa may find Bangladeshi and Nepali suppliers unusually willing on price over the coming quarters.
Finally, the file is a reminder that trade remedies applied by a large economy against small neighbours operate asymmetrically. The measure is a rounding error in India’s import bill and a structural threat to an industry in Nepal. That asymmetry is not a defect in the World Trade Organization rules, which apply the same evidentiary tests regardless of the relative size of the parties. It is a feature of them, and it is why capacity to participate in foreign trade remedy proceedings has become a development issue in its own right.
What to watch
Three developments will shape this file over the next year.
The first is the Nepal-India Trade Treaty review. A technical committee is to be formed within six months, and both sides are to exchange nominations. If that process produces a framework that handles trade remedy questions differently for a least developed neighbour, it would be the first structural change in the relationship in years. If it produces another round of technical meetings, the status quo holds.
The second is whether Bangladesh escalates. Dhaka has previously raised Indian jute duties in bilateral fora and has the option of pursuing the matter through World Trade Organization dispute settlement, though the appellate impasse limits the value of that route and the political relationship has its own constraints.
The third is the next review cycle. The current re-quantification follows a mid-term review completed in June. The measure’s overall term will bring a further review in due course, and producers currently facing high rates have that window to prepare a better-documented case.