Problems of India’s Jute Industry

India’s first jute factory in India was established at Rishira, near Kolkata in 1854. Prior to independence, India had monopoly in the both production of raw jute and jute manufacturing. However, Jute industry is marred with several problems right since independence. The first major blow to this sector was given by Partition.  On partition, most of Jute mills remained in India while major Jute producing area went to East Pakistan (Now Bangladesh). The problem of raw material created a crisis in the Jute sector when Pakistan denied supply of raw Jute to India. The area extension under Jute were one of the key efforts of the Government in this sector.

The current problems of Jute Industries are as follows:

Shortage of Raw Material

Despite of the Government efforts to increase area under Jute, India is not self sufficient in raw material. The raw material is imported from Bangladesh and some other countries. The problems is further aggravated by import of finished Jute products both legally and illegally. These problems never allow Jute industry to be competitive. This necessitates a “Golden Fibre Revolution” in India.

Obsolete Mills and Machinery

The mills and machinery in Jute sector are obsolete and need technology upgradation. The Government had launched a Jute Technology Mission (JTM) in 2006 with four mini Missions. on Jute Research; Development / extension of raw jute agriculture; marketing of raw jute and processing, utilisation and industrial aspects of raw jute. But this mission was unable to achieve targets and use the allocated funds.


Indian Jute industry faces competition in the global market with countries such as Bangladesh, Philippines, South Korea, Japan etc. The industry also loses competitiveness due to obsolete technology, higher prices and industrial sickness in the Jute mills. The industry has become stagnant, unproductive and inefficient due to over dependence on jute sacks; and non-diversification.

Decrease in the Demand

Jute products are fast losing market to plastic, synthetic fibres and similar substitute products. The parliament of India had enacted the Jute Packaging Mandatory Act, 1987 with an objective to protect the Jute industry.

Strikes and Lock-outs

Jute Industry is reeling under a crisis triggered by the shutdown of jute mills.

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