Business News Agency, February 18 – In a recent development, the Ministry of Commerce in Bangladesh reported that the Inland Revenue Department of India has revoked its decision to impose a 14% tariff on Bangladeshi jute and jute products. The notice was issued on February 14, 2011, marking a significant shift in trade relations between the two neighboring countries.
Earlier, on January 18, 2011, the Indian government had introduced the 14% tariff, which included an 8% countervailing duty (CVD), a 4% additional tax, and 2% in other charges. This move had raised concerns among Bangladeshi exporters who relied heavily on the Indian market for their jute exports.
Before the imposition of this tax, jute and jute products from Bangladesh had enjoyed zero tariffs when exported to India, a policy that remained in place until 2004. The sudden introduction of the tax created a major hurdle for Bangladeshi traders, leading to a backlog of around 3 billion worth of jute goods stuck at Indian borders.
The decision to remove the tariff is seen as a positive step toward resolving the trade dispute. It also provides much-needed relief to Bangladesh’s jute industry, which has been gradually recovering from the effects of the global economic downturn. With rising global demand for jute-based products, the removal of the tax is expected to boost exports and enhance competitiveness.
Bangladeshi jute exporters have expressed relief over the change, noting that the previous taxation had significantly weakened the market position of their products. Indian traders also voiced their concerns, arguing that the sudden imposition of taxes on natural fibers was unfair and not in line with existing Indian trade laws. They emphasized that such measures lacked legal backing and were detrimental to trade relations.
This latest development highlights the importance of maintaining stable and fair trade policies between neighboring nations, especially in sectors like jute, which play a vital role in the economies of both countries.
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