[Answered] What are the factors behind present location of jute industries in India. Also, highlight the challenges facing Indian jute industry.

As per the Food and Agriculture Organisation (FAO), India is the largest producer of jute followed by Bangladesh and China. However, in terms of acreage and trade, Bangladesh takes the lead accounting for 75% of the global exports in comparison to India’s 7%. West Bengal, Bihar and Assam account for almost 99% of India’s total production.

There are about 70 jute mills in India, mostly located in West Bengal along the banks of Hugli river in West Bengal. The factors behind present location of jute industries are:

• Raw material: Availability of natural resources that can be used as raw material.
• Water supply: Abundant water for processing raw jute.
• Easy Transportation: It is well connected by a good network of railways, waterways, and roadways to facilitate the movement of raw materials to the mills. Inexpensive water transport is also provided by the Hugli river.
• Labour: Availability of cheap labour from West Bengal and the adjoining States of Bihar, Orissa, and Uttar Pradesh.
• Kolkata as a port and large urban center, provides banking, insurance, and port facilities for the export of jute goods.

Challenges:

• High procurement cost: The mills procure raw jute at higher prices than what they sell them at after processing. Mills do not acquire their raw material directly from the farmers, but instead through intermediaries.
• Raw material supply: India is not self-sufficient in the supply of raw material. To meet the growing need of the industry, raw material is imported from Bangladesh, Brazil, and Philippines.
• Low production: The machineries are outdated and lead to low production. The recent occurrence of Cyclone Amphan and subsequent rains in major jute producing States also led to lower acreage, which in turn led to lower production and yield.
• Low domestic demand: The increased availability of synthetic substitutes is affecting the domestic demand for jute.
• Lagging in export: As the CACP report stated, Bangladesh provides cash subsidies for varied semi-finished and finished jute products. Hence, the competitiveness emerges as a challenge for India to explore export options in order to compensate for the domestic scenario.

Bio-degradable, eco-friendly jute made-ups have a very big international market. But there is an urgent need for the domestic jute market to diversify. The need of the hour is to upgrade and adopt new technology, new manufacturing standards and evolve with time.