India has imposed anti-dumping duty ranging from $6.30 to $351.72 per tonne on the import of jute and jute products from Nepal.

According to Indian media reports, the duty has been imposed for five years, effective from Friday, to protect Indian industry. The import-restrictive levy has been imposed on jute yarn/twine, Hessian fabric and jute sacking bags in “all forms and specifications”.

According to the reports, based on complaints of local players, the Directorate General of Anti-Dumping and Allied Duties of India had initiated a probe into imports of the products in 2015.

In its final order, issued in October last year, it had come to the conclusion that there is dumping of goods and the imports were “undercutting and suppressing the prices of the domestic industry”.

“Performance of domestic industry has deteriorated in the terms of profitability return on investments and cash flow (and) injury to domestic industry has been caused by dumped imports,” the probe report said.

Nepali jute producers import 70 percent of raw materials from India and export finished products to the southern neighbour. Nearly 95 percent of Nepali jute is exported to India.

Raj Kumar Golchha, president of Jute Industry Association, said India’s move has put the already struggling Nepali jute industry on the verge of collapse. He said the Indian department has slapped 3-4 percent duty on jute rope, 4-5 percent on jute sacks and 0-2 percent on hessian jute fabric.

Traders said extended loadshedding hours, labour issues and lack of incentives have forced most of the local jute factories to close down. Among 12 jute factories in the country, only four—Arihant, Raghupati, Baba and Swastik—are in operation. These mills employ 12,000 workers.

Moreover, the industry has been dropped from the government’s priority list even though the demand for more ecological packaging globally has strengthened its export potential.

Three decades ago, the country used to be a major exporter of jute to Europe, and the golden fibre was one of the major sources of foreign exchange.

Jute was grown on 56,000 hectares, but now the cultivation has shrunk to 11,000 hectares.

The government has also removed subsidies on fertilisers, seeds and pond construction. The country used to produce 150,000 tonnes of jute three decades ago, which has now plunged to 17,000 tonnes.