India Increases Anti-Dumping Duty on Nepali Jute Products, Pressure Mounts on Industry

India has decided to increase the anti-dumping duty on Nepali jute products, placing severe pressure on Nepal's jute industry. This decision is particularly concerning for jute mills located in eastern Nepal, where the majority of the country's mills operate. India is the largest market for Nepali producers, and they are entirely dependent on this market; however, they must now pay higher duties to sell their products.

According to a report by The Kathmandu Post, a notification was issued by India's Ministry of Finance on September 24, 2026. According to this notification, anti-dumping duties have been fixed at different rates for Hessian fabric, jute bags, as well as jute yarn and twine. These rates have been kept varied based on the type of product and the producing company.

Anti-dumping duties are additional tariffs imposed to protect a country's domestic industries. When a foreign company sells its products at a price lower than the normal market value or production cost, it is termed 'dumping'. Foreign companies attempt to gain an unfair advantage in another country's market through this practice, and countries like India impose such duties to prevent this.

For some Nepali producers, the newly revised rates are nearly four times higher than previous rates. For example, Swastik Jute Mills, located in Biratnagar, previously paid an anti-dumping duty of $8.18 per tonne on Hessian fabric exported to India. However, under the new arrangement, this rate has increased to $132 per tonne. Similarly, the duty rate on Hessian fabric exported by Baba Jute Mills has increased from $6.30 to $64 per tonne.

For some producers, the countervailing duty is higher than the anti-dumping duty. Countervailing duties are additional tariffs imposed to offset the effect of subsidies provided by a foreign government to its domestic industries. Such subsidies can give exporters an unfair advantage over producers in the importing country. India's Directorate General of Trade Remedies (DGTR) has recommended a countervailing duty ranging from $54.77 to $60.54 per tonne on jute products imported from Nepal. The process of imposing such duties on jute products imported from Nepal and Bangladesh was initiated by India in 2025.

Rajkumar Golchha, President of the Nepal Jute Industries Association, stated that the government's attention had been repeatedly drawn to this anti-dumping duty by the industry. Golchha, who operates two of Nepal's major jute producing companies, Raghupati Jute Mills and Arihant Multifibres, added, "We hope that this issue will be seriously discussed during the Prime Minister's upcoming visit to India. There is very little possibility of resolving this problem without an agreement between the two governments."

Golchha argues that accusing Nepali producers of lowering prices for Indian producers is unrealistic, as Nepal's share in India's total jute production is less than 1 per cent. Furthermore, Nepali producers depend on India and Bangladesh for raw materials and spare parts. He stated that India has initiated trade remedy proceedings based on the impact of imports on its domestic industry and subsidies provided by foreign governments.

Anti-dumping and countervailing duties are two different trade remedies. The purpose of anti-dumping duty is to protect against products sold at inappropriately low prices, while countervailing duty addresses the effect of subsidies from foreign governments.

Nepal's jute industry exports products worth approximately ₹11 billion annually. In the last financial year, exports of jute products reached ₹10.89 billion, with exports of Hessian fabric to India accounting for the largest share. According to last financial year's figures, Nepal exported Hessian fabric worth ₹7.2681 billion to India. Additionally, exports of jute bags were over ₹2.74 billion, while exports of twine remained around ₹880 million.

These figures demonstrate how heavily Nepal's jute industry depends on the Indian market. Now that the duty has increased, Nepali producers have two options: either they must increase the prices of their products in India or bear the burden of this additional cost themselves.