India agreed in principle not to carry out investigations relating to anti-dumping and countervailing duties on jute goods exported from Bangladesh, a senior commerce ministry official said yesterday.

“We were successful in convincing India that Bangladesh has sufficient reasons to give subsidy and cash incentive against exports and that it is given in line with international trade norms,” Monoj Kumar Roy, additional secretary of the commerce ministry, told The Daily Star.

Monoj led a Bangladesh delegation comprising officials of Tariff Commission, World Trade Organisation (WTO) cell and Jute Department to discuss the anti-dumping and countervailing duties initiated by India on Bangladeshi jute products. The meeting with India's Directorate General of Anti-Dumping and Allied Duties (DGAD) was held in Delhi on Wednesday.

At the meeting Monoj explained Dhaka's position vis-à-vis India's allegations against Bangladesh giving subsidy and cash incentive to its jute products.

The issue came to the fore in October last year when the DGAD under the ministry of commerce of India started investigating imposition of anti-dumping and countervailing duties on jute goods exported from Bangladesh based on the claims of Indian Jute Mills Association.

If a company exports a product at a price lower than that in the home market, it is considered to be "dumping" the product. Accordingly, the importing government takes action against "dumping" in order to defend its domestic industries.

On the other hand, countervailing duties are imposed against subsidies and cash incentives given by exporting countries to make their products more competitive, but importing countries often believe that such duties are given to injure their industries.

Jute millers and exporters here have been denying the Indian millers' allegations against Bangladesh "dumping" its products. They have said Bangladesh's jute quality is high and it is sold at a higher price than that of India.

“We have made the DGAD of India understand that Bangladesh as an LDC (least developed country) can provide subsidy and cash incentives against exports. Our subsidy and cash incentives, which are decreasing gradually, cannot injure Indian industries,” said Monoj on the outcome of the meeting with the DGAD of India.

Despite being a developing country, he said, India gives 10 percent cash incentive against export of jute products while Bangladesh provides only 5 percent for jute yarn and 7.5 percent for other jute goods.

Monoj also brought another point to India's attention that as per WTO rules no country can launch investigations against countervailing and anti-dumping duties simultaneously. But India initiated the move simultaneously, he said.