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How To Export Jute Products From India

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Introduction: Expert Jute Product

Jute production is one of India's oldest and most well-known industries. Since India is one of the world's top consumers of jute and jute products, the majority of the jute produced is used domestically. One of the main factors driving India's demand for jute is the country's stringent regulations regarding acceptable kinds of packaging materials. Jute fiber is biodegradable and reusable. Jute bag consumption has significantly expanded over the past year, making it profitable. Low thermal conductivity, outstanding insulation, and moderate moisture retention are just a few of the qualities of jute. The growing awareness of environmental issues has also increased consumer preference for natural and biodegradable goods like jute.

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Products made from Jute

  • Hessian or Burlap (Plain-Woven Fabric) 
  • Sacking (Loosely Woven Cloth)
  • Food-Grade Jute Cloth
  • Yarn
  • Carpet Backing Cloth 
  • Blanket
  • Decorative Fabrics 
  • Floor Coverings
  • Shopping Bags

How to Export Jute from India

For exporting jute and jute products, exporters are required to obtain-

  • Import Export Code

Import Export Code (IEC) from the Directorate General of Foreign Trade (DGFT) and Registration/Membership Certificate (RCMC) from Export Promotion Council(s).

  • Relevant Documents

Keeping following the type of goods, documents shall be prepared. Following are a few essential documents an exporter shall have-

  1. Bill of Lading
  2. Bill of Export
  3. Commercial Invoice 
  4. Foreign Exchange Form
  5. Documents against acceptance and payments
  • Finance for Export

After obtaining a license, the exporter may now approach a bank that shall help him proceed with the export process.

  • Ensure Product formalities
  1. The exported items shall be properly labeled and stamped as required by the importer. 
  2. Get insurance against credit risks. It can easily be done by Export Credit Guarantee Corporation.
  3. Apply for Marine Insurance
  4. Run an inspection and obtain a certificate from the Export Inspection Agency.
  • Foreign Exchange Rates and Other Formalities

It is important to determine the updated exchange rate so the transaction of the shipment is smooth. It is easier to go ahead if the importer and exporter mutually fix the rates of the shipment. Before the shipment, the exporter needs to follow the provisions of the Foreign Exchange Regulation Act of India (FERA). 

  • Ensure RBI Guidelines are Followed

An exporter must ensure that the RBI guidelines are strictly followed. Foreign exchange on an export shall be followed as per the working of the RBI.

Statistics

The exports of Indian jute and jute products have increased over the years.

A study published by the Ministry of Textiles, India is the leading jute goods-producing country globally, accounting for about 70% of estimated world production. The exports of Indian jute and jute products have increased over the years. National Jute Board statistics, the export of all jute goods to the top 20 countries between April 2021-October 2021 stood at 83% of the total exports valued at Rs. 20,214.48 million (USD 263 million), indicating the significant share of traditional markets

Read Our Blog: Certifications & Legal Compliance Required to Export Jute From India

Top 5 importers of Jute Products from India

  • USA
  • France
  • UK
  • Netherlands
  • Spain

Government Policies

The National Jute Board has put in place several programs and initiatives to modernize and promote the jute sector in India. Improved Cultivations and Retting Exercises (ICARE), Jute Diversifications Scheme, Jute Resource-cum Production Centre (JRCPC), and Jute Retail Outlet Scheme for Exposure to Products and Artisans are some of the programs intended to boost production. Increased sales and exports of jute goods from India are the goals of market development and promotion, domestic market promotion activities (DMPA), and other publicity and promotion initiatives.

  • Export Market Promotion Activities (EMPA)

Under EMPS, the government carries out some initiatives, including business delegations, road shows, international conferences, seminars, and mega fairs at the international level in India and overseas.

  • Market Development & Promotion scheme (MDPS)

MDPS scheme was initiated to promote and expand markets for Jute and Jute diversified products within India and abroad. It encourages the selling, marketing, and promoting spaces to Jute Artisans, entrepreneurs, women groups, Jute MSMEs, Jute exporters, and Jute millers.

  • Capital Subsidy for Acquisition of Plants and Machinery

The National Jute Board (NJB), a statutory authority under the Ministry of Textiles, Government of India, has approved and is responsible for implementing the CSAPM scheme. The Scheme's goal is to give beneficiaries financial support for manufacturing equipment for jute diversified products (JDP). During the 15th Finance Commission, this Program was launched under the National Jute Development Program (NJDP) umbrella plan of NJB (2021-26).

  • Export Market Development Assessment

Jute exporters can participate in international trade fairs and exhibitions under a program for jute diversified products (JDPs) that will compensate them for a portion of their travel costs and booth rent, including decorations. The government contributes 50% of the maximum cost of participation in an international event under the Market Development Assistance Scheme, up to a maximum of Rs. 3.75 lakhs, to pay rent, decorating costs, air travel, and lodging costs for the promotion of export in any nation.

Government Schemes

  • The National Jute Board

In 2008, the Government of India's Ministry of Textiles established the National Jute Board. The board strives to create human resources for creativity and the investigation of novel concepts. The jute board's activities include the spread of technology, support for machinery, the development of human resources through training, etc.

  • Jute Product development & Export Promotion Council

The JPDEPC was established in 1958 to promote jute and jute-related exports from India. The council's duties include organizing fairs and expositions, researching the buyer-seller market, and registering export.

Tax Benefits on the Export of Jute

  • Article 273 of the Indian Constitution deals with grants instead of export duty levied on the jute and its products. They shall be charged to the Consolidated Fund of India every year as grants for the revenues of the states of Bihar, Assam, West Bengal, and Orissa. The question of giving the jute-growing provinces a share of the export duty on jute and jute products was considered during the constitutional debates after the enactment of the Government of India Act 1935.
  • To help the industry, which has been struggling with weak international demand, the government has provided tax concessions to exporters of jute products.
  • Manufacturers of jute products will now pay a 10% corporate tax on their export earnings through fiscal 2019–20, down from 15% previously.
  • According to two different rulings issued by the National Board of Revenue, exporters will continue to benefit from a 0.6 percent source tax on their export earnings until June 30, 2019.

Conclusion

The Jute industry occupies an important place in the national economy of India. Jute, the golden fiber meets all the standards for ‘safe’ packaging because of being a natural, renewable, biodegradable, and eco-friendly product. In India, West Bengal, Assam, Bihar, Orissa, and Andhra Pradesh are the principal jute-producing states. However, due to the greater number of mills, West Bengal is where the Indian jute sector is most dependent. Data from the Export Promotion Bureau (EPB) shows in the first seven months of FY22, all exports except for jute and jute goods have witnessed positive growth. Despite incurring losses and low demand, exports of jute have picked up slowly but gradually in the year 2022.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.

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Author
Sagar Sharma
I have over 8 years of experience working in product regulatory compliance. Currently, I work as the operations head at Corpseed Ites Pvt Ltd, where my Job role is providing best in class consulting in the field of product compliance.

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