Jute Industry

In the last section, we have studied that when industries are set up, they’re not located randomly. There are certain practical factors—called locational factors—that make a place ideal for a specific industry.

Now, when it comes to the jute industry, it’s like the lifeline of Eastern India, especially West Bengal. But why has it flourished there, and what challenges does it face today?

Why West Bengal? Why Hooghly Belt?

The jute industry in India is heavily concentrated in West Bengal, with about:

• 80% of the industry located here
• 84% of the jute goods produced in this region
• Direct and indirect employment to around 4 lakh people

The Hooghly River Basin has become the core industrial zone for jute mills. Why? Let’s understand:

Major Locational Factors

1. Raw Material Proximity
   • The Ganga-Brahmaputra Delta—a naturally fertile region—produces over 70% of India’s jute.
   • Being near the farms means fresh jute, lower transportation cost, and less spoilage.
2. Fuel Supply
   • Mills need power, and coal from Raniganj coalfields is easily transported here.
3. Water Availability
   • Jute processing requires large quantities of water—for retting, washing, dyeing—and the Hooghly River provides it in abundance.
4. Climate
   • A humid climate prevents the jute fibers from snapping during spinning and weaving.
5. Transportation Network
   • Excellent water transport
   • Efficient rail and road connectivity
   • Nearby Kolkata Port supports both import (from Bangladesh) and export of jute products.
6. Labour Supply
   • Bengal has a high population density, so cheap, skilled and unskilled labour is readily available.
7. Capital and Entrepreneurship
   • Presence of rich capitalist families in Kolkata ensured early investment and growth.
   • Financial institutions, banks and insurance companies were already established.
8. Historical Headstart
   • Jute industry began during British rule, giving Bengal a significant first-mover advantage in terms of setup and infrastructure.

Structural Problems in the Jute Industry

1. Partition Legacy
   • In 1947, most jute-producing areas went to East Pakistan (now Bangladesh) while India retained most mills.
   • This created a raw material shortage for Indian mills.
2. Synthetic Competition
   • Cheaper and more durable synthetic packaging materials (like polypropylene bags) from advanced countries pose stiff competition.
3. Bangladesh’s Edge
   • Bangladesh has newer mills, better machinery, and lower costs, so it offers better quality jute at cheaper prices.
4. Global Trends
   • Declining international demand, high input costs, and low modernisation make Indian jute less competitive.

Future Prospects: What Can Be Done?

1. Expand Cultivation
   • New areas should be brought under jute farming to reduce dependence on imports.
2. Modernise Machinery
   • Outdated machines need urgent replacement to match global standards.
3. Revive Sick Units
   • The National Jute Manufacturing Corporation (NJMC) is working on modernising old units.
4. Boost Research & Innovation
   • The Jute Technology Mission (2006) focuses on:
     • R&D support
     • Technology transfer
     • Market infrastructure
     • Promotion of jute diversified products (like decor items, shoes, handbags)

Government Schemes & Legal Safeguards

1. National Jute Board (Ministry of Textiles)

• Acts as the apex body to support the industry via planning, promotion, and research.

2. ISAPM (Incentive Scheme for Acquisition of Plant & Machinery), 2013

• Offers 20% subsidy on new machinery for modernisation.

3. Minimum Support Price (MSP)

• If raw jute prices fall, the Jute Corporation of India (JCI) procures jute to protect farmers.

4. Jute Packaging Materials Act (JPMA), 1987

• 100% of food grains and 20% of sugar must be packed in jute bags.
• Protects jute industry demand, but is controversial:
  • Sugar is moisture-sensitive and may degrade in jute bags.
  • Cement and fertilisers were removed from the Act due to similar packaging issues.

5. Jute Raw Material Bank Scheme (Recent Initiative)

• Ensures steady raw material availability for small jute entrepreneurs.
• Operated under the National Jute Board, it helps in cost-effective procurement and encourages rural artisans.

6. PM MITRA Parks (2021)

• While not jute-specific, these Mega Integrated Textile Region and Apparel Parks can offer jute players space for integrated production and innovation.

📈 Why the JPMA is Still Justified?

1. Gunny bags use 63% of India’s raw jute
2. Over 3.7 lakh workers depend on the industry
3. No better alternative crop exists in flood-prone regions

Global Snapshot

• Top Jute Producers: India, Bangladesh
• Top Consumers: India, Bangladesh, Pakistan
• Top Exporters: Bangladesh, India
• Top Importers: Pakistan, India

Note: India produces more jute but still imports fiber from Bangladesh due to low local output.

✅ Conclusion

The jute industry is India’s classic case of natural advantage with industrial potential, but lost ground due to neglect and outdated practices. If modernisation continues—backed by smart schemes, legal protection, and R&D—it can thrive as a sustainable, eco-friendly packaging solution in the world. This is not just an economic issue—it’s also an employment, environment, and regional development story.