Bangladesh’s jute industry is facing renewed strain as exporters grapple with a sharp increase in transportation costs following India’s decision to restrict jute imports via land ports, industry stakeholders said.

In late June, India’s Directorate General of Foreign Trade issued a directive prohibiting the entry of Bangladeshi jute and jute goods through traditional land ports along the border, including Benapole, Hili, and Bhomra.

The notification allows only one entry point—Nhava Sheva Port in Maharashtra—forcing exporters to reroute shipments via the Chittagong seaport and then overland across India.

The shift in logistics has increased cargo transportation costs by $100 per tonne, jute exporters say, rendering the product less competitive in India, Bangladesh’s primary market for jute goods.

Abul Hossain, chairman of the Bangladesh Jute Mills Association (BJMA), wrote to Finance Adviser Dr Salehuddin Ahmed, warning that the new restriction could inflict severe damage on the jute sector, which is already under pressure from multiple fronts.

In a recent meeting of trade body leaders, stakeholders demanded government compensation to offset the added cost burden. They also called for broader fiscal support to safeguard the future of jute production and exports.

Mr Hossain said new tax measures introduced in the FY2025–26 budget, such as a 0.5% tax at source on raw jute, a 10% tax on cash incentives, and 1% tax on export value, could further discourage farmers and reduce jute production.

He also criticised the recent cuts in cash incentives for jute goods exports, noting that rates were reduced by nearly 60% since February 2024. Combined with India’s longstanding anti-dumping duties, he argued, these factors are severely undermining the sector’s viability.

The BJMA has urged the government to withdraw all taxes on raw jute for at least five years and restore previous cash incentive levels.