The Indian government has said it will look positively at Nepal’s request to waive anti-dumping and countervailing duties on its jute products. 

Indian Textiles Minister Smriti Zubin Irani gave this assurance during a meeting with the Nepali ambassador to India Deep Kumar Upadhyay on Wednesday, the Nepal Embassy in New Delhi said in a statement.

Upadhyay had asked the Indian minister to rethink the decision to impose anti-dumping and countervailing duties on Nepali jute products shipped to India, and to provide easy access as in the past.

Minister Irani said she would “look into the matter” and give it “positive consideration”. 

India has been imposing anti-dumping duty ranging from $6.30 to $351.72 per tonne on jute and jute products imported from Nepal since January 6. The duty, according to Indian media reports, will be in place for five years to protect Indian industry. The import-restrictive levy has been imposed on jute yarn and twine, Hessian fabric and jute sacking bags in “all forms and specifications”.

The duty was imposed after the Directorate General of Anti-Dumping and Allied Duties of India launched an investigation into imports of the products in 2015 following complaints from domestic players.

In its final order issued in October last year, the authority acknowledged that there was dumping of the goods, and that imports were “undercutting and suppressing the prices of the domestic industry”.

The probe report said, “Performance of domestic industry has deteriorated in terms of profitability, return on investments and cash flow because of dumped products.”

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

Those engaged in the production of jute goods in Nepal have said the Indian government’s move has pushed the feeble Nepali jute industry to the verge of collapse. What’s worse, the industry has been knocked off the government’s priority list even though demand for more ecological packaging worldwide has enhanced its export potential.

Of the 12 jute factories in the country, only four—Arihant, Raghupati, Baba and Swastik—are currently in operation. These mills employ 12,000 workers.

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. At that time, Nepal used to produce 150,000 tonnes of jute annually. Production has now plunged to 17,000 tonnes.