Jute Stocks Rally As India Blocks Bangladesh Imports Via Land Route

Shares of jute companies Gloster Ltd, Cheviot Company Ltd, and Ludlow Jute & Specialities Ltd rose on Tuesday, August 12, following India’s decision to ban the import of certain jute products from Bangladesh through all land routes.

Gloster shares gained up to 6.70 per cent to touch an intraday high of Rs 705 apiece on the NSE, Ludlow Jute rallied 5 per cent to get locked in at the upper circuit at Rs 457.55 apiece on the BSE, and Cheviot Company’s stock rose as much as 2.83 per cent to hit intrday high at Rs 1,199.90 per share on the NSE in early trade.

The Ministry of Commerce and Industry issued a notification restricting imports from Bangladesh at land ports along the India-Bangladesh border. According to the notification, "Imports from Bangladesh shall not be allowed from any land port on the India-Bangladesh Border. However, it is allowed only through the Nhava Sheva Seaport."

The ban targets specific jute-related goods classified under certain Harmonised System (HS) codes, including bleached and unbleached woven fabrics made of jute, twine, cordage, rope, cables, sacks, and bags made of jute.

Earlier Actions Targeted Wider Range of Imports

The latest restriction extends the regulations introduced earlier this year. A notification dated June 27 by the Ministry of Commerce listed several goods from Bangladesh, including flax tow, raw jute, jute fibers, flax yarn, and woven flax fabrics, for regulatory measures.

The notification also added that these restrictions will not affect exports from Bangladesh to Nepal or Bhutan. However, it clarified that goods from Bangladesh re-exported to India via Nepal or Bhutan will not be allowed.

On May 17, India also banned ready-made garments from Bangladesh at all land ports except those in Navi Mumbai and Kolkata. The ban also included items like fruit juices, carbonated drinks, processed foods, cotton waste, plastic goods, and wooden furniture.

Strained India-Bangladesh Relations

Trade tensions between India and Bangladesh escalated after Muhammad Yunus, Bangladesh’s interim government head, made controversial remarks during his visit to China in March this year.

Yunus had said that the seven northeastern states of India are landlocked and lack direct access to the ocean. He called Bangladesh “the only guardians of the ocean” for the region and suggested this could make Bangladesh an extension of the Chinese economy for trade and production.

Relations between India and Bangladesh have deteriorated since the ousting of the Sheikh Hasina government, largely because of Bangladesh’s growing closeness to China.