The jute industry in Bangladesh comprises the cultivation and trade of raw jute and the spinning, weaving, processing and export of jute products. Jute was historically one of the most important commodities of the Bengal delta and later a major source of industrial employment and export earnings in East Pakistan and Bangladesh.
In fiscal year 2025–26, Bangladesh earned US$883.69 million from exports of jute and jute goods, 7.75 percent more than in the previous fiscal year. In June 2026, the government reported 266 licensed jute mills, of which 193 were operating and 73 were closed. Twenty-five of the licensed mills were state-owned mills under the Bangladesh Jute Mills Corporation (BJMC).
History
Commercialisation in Bengal
Jute had long been used in Bengal for rope, cloth and other household products before becoming a major commercial crop in the nineteenth century. Mechanical spinning of jute was successfully developed in Dundee, Scotland, during the 1830s, increasing European demand for Bengal-grown fibre. Contemporary records indicate that large-scale commercial cultivation in Bengal expanded rapidly from the 1840s.
The first mechanised jute mill in Bengal was established at Rishra, near Kolkata, in 1855. During the second half of the nineteenth century, jute manufacturing expanded around Kolkata while the eastern districts of Bengal became major producers of raw fibre.
By the time of the Partition of India in 1947, more than three-quarters of the jute-growing land of undivided Bengal was located in the territory that became East Pakistan, while the established jute mills were concentrated on the Indian side of the new border around Kolkata. The division separated raw-jute production from much of the region's processing capacity and led both India and Pakistan to develop more self-contained jute industries.
East Pakistan
New jute-manufacturing capacity was developed in East Pakistan after partition. Bawa Jute Mills, Victory Jute Products and Adamjee Jute Mills began operating in 1951. Government-backed industrialisation and private investment subsequently expanded the sector.
By 1970, East Pakistan had 77 jute mills employing about 170,000 people. Jute and jute goods had become a major source of Pakistan's foreign-exchange earnings, while the growth of local mills reduced East Pakistan's dependence on processing facilities in India.
Nationalisation and privatisation
Following the Bangladesh Liberation War, the government nationalised major industrial enterprises, including jute mills. The Bangladesh Jute Mills Corporation was established under the Bangladesh Industrial Enterprises (Nationalisation) Order, 1972 to manage the nationalised jute-manufacturing enterprises.
BJMC initially managed 78 mills, a total that rose to 82 by 1981. The state-owned mills experienced persistent problems with excess capacity, debt and operating losses. The government began reducing direct state ownership during the 1980s. A World Bank review reported that 35 of 66 mills were partially privatised between 1982 and 1986.
Further restructuring and mill closures followed in the 1990s and 2000s. Adamjee Jute Mills, once the country's largest jute mill, was closed in 2002 after years of losses.
Industry structure
The contemporary industry includes raw-jute traders, spinning mills, weaving mills and manufacturers of traditional and diversified jute products. Conventional products include yarn and twine, hessian fabric, sacking and bags, while diversified products include home textiles, floor coverings, footwear, fashion accessories, handicrafts, paper and pulp products and other industrial materials.
As of June 2026, Bangladesh had 266 licensed jute mills, including 25 state-owned mills under BJMC. Of the total, 193 mills were operating and 73 were closed. The figures include both public and privately owned mills.
State-owned mills and leasing
On 1 July 2020, production was suspended at 25 state-run BJMC mills. The government said the mills had suffered long-running financial losses and announced a settlement programme for approximately 25,000 workers. At the time, the government reported that BJMC had recorded losses in 44 of the preceding 48 years and had accumulated losses of Tk 10,674 crore by fiscal year 2018–19.
The government subsequently moved towards reopening state-owned mills under private management through leasing. In June 2026, 14 mills had been leased and nine had resumed production. By September, 17 mills had been leased, with production operating at nine of them and employment of about 9,500 workers reported at the reopened mills. Leasing procedures for additional BJMC mills were continuing.
Domestic market and packaging policy
The government has used mandatory packaging rules to create domestic demand for jute goods. The Mandatory Jute Packaging Act, 2010 requires specified commodities to be packaged in jute sacks. By 2023, the requirement covered 19 commodities, including paddy, rice, wheat, maize, fertiliser, sugar, flour and animal feed.
Implementation has been uneven. Reporting in 2023 and 2024 found continued widespread use of plastic sacks for products covered by the law despite enforcement drives.
Exports and trade
Jute and jute goods remain an important non-garment export category. Export earnings had declined for several years before recovering in fiscal year 2025–26, when exports increased by 7.75 percent to US$883.69 million. The previous fiscal year's earnings were approximately US$820.8 million.
In September 2026, the textiles and jute minister told Parliament that Bangladesh had earned Tk 84,002.57 crore from exports of raw jute and jute products during the preceding ten years. The minister said Bangladeshi jute products had reached markets in 138 countries and raw jute had been exported to around 30 countries during that period.
Raw-jute export policy has changed in response to domestic supply and price concerns. In September 2025, the government moved raw jute to the conditional-export list, requiring prior approval for shipments. In September 2026, the textiles and jute minister told Parliament that raw-jute exports were suspended at that time.
Trade barriers
India has imposed anti-dumping duties on several categories of jute goods imported from Bangladesh. In September 2026, India revised the duty structure following a mid-term review. The measures apply to products including jute yarn and twine, hessian fabric, jute sacking bags and sacking cloth.
The revised duties vary by producer and product. Some Bangladeshi producers received zero-duty treatment for particular product categories, while the highest rate in the revised schedule was US$445 per tonne for specified jute yarn and twine.
Research and diversification
The Bangladesh Jute Research Institute traces organised jute research in Dhaka to work initiated in the 1930s. The Jute Research Laboratory was reorganised as the Jute Research Institute in 1951, and after the independence of Bangladesh it developed into BJRI, conducting agricultural and technological research on jute and allied fibres.
In 2010, a Bangladeshi research consortium led by Maqsudul Alam completed a draft sequence of the jute genome. Researchers from the University of Dhaka, BJRI and DataSoft worked with researchers at institutions in Malaysia and the United States.
Research and industrial-development programmes have also sought to expand jute beyond traditional sacks, yarn and hessian into higher-value products. Bangladeshi scientist Mubarak Ahmad Khan developed a cellulose-based polymer made from jute fibre that was used to produce biodegradable bags under the Sonali Bag initiative. Pilot production took place at Latif Bawani Jute Mills.
Challenges
The industry faces competition from synthetic fibres and other low-cost substitutes. In June 2026, the textiles and jute minister also identified outdated machinery, limited internationally recognised testing facilities, weak branding and insufficient market development as obstacles to the competitiveness of Bangladeshi jute products.
Domestic raw-jute prices and export restrictions have also produced competing interests among farmers, raw-jute traders and mill owners. Millers have supported restrictions intended to secure domestic raw-material supplies, while traders have argued that tighter export controls can reduce competition for farmers' fibre and disrupt the raw-jute trade.
At the same time, demand for biodegradable materials has encouraged efforts to develop diversified jute products for packaging, home textiles, fashion, geotextiles and industrial applications.
See also Jute Jute cultivation Bangladesh Jute Mills Corporation Bangladesh Jute Research Institute Directorate General of Jute (Bangladesh) Jute production in India
References