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India's sugar industry and government clash over jute bags

India's sugar industry and government clash over jute bags

India, which is the largest sugar consumer in the world, has seen the federal government and jute bag producers go to court over an issue that has been a source of contention: Jute bags.

The government of Prime Minister Narendra Modi has tightened the enforcement of a law from 1987, which requires sugar mills pack 20% of their supply in jute bag or pay fines if they do not comply. This is in an effort to support traditional fibres.

Indian sugar mills have filed a lawsuit challenging the law, claiming that using jute bags costs them $76 million more per year than recyclable plastic bags. The Indian sugar mills also claim that the fibre bags increase the risk of contamination with sugar, according to previously unreported documents.

In a court filing, the Indian government argues that concerns about contamination are unfounded because jute bags have a higher level of durability and pest resistance than recyclable plastic packaging. The Indian government also informed the High Court in Karnataka of the importance of the law to protect the traditional industry that supports 4,000,000 agricultural families.

These lawsuits are the latest in a series of legal battles between Modi's Government and big companies. Daikin, Samsung and other global and Indian electronics companies are suing Modi separately over his plans to regulate the amount they have to pay for recycling e-waste.

The documents related to the lawsuit that began in August were not made public, but they have been reviewed this week. The Karnataka High Court will begin hearing the final arguments on Wednesday. A ruling is expected to be issued in the coming weeks.

One letter from December shows that the government warned sugar factories to "take non-compliance of jute packaging regulations seriously" and take "severe action".

Both the sugar industry group in India and the Indian government have not responded to our queries.

In court documents, sugar producers claimed that the jute bag regulations were also damaging to business. Many buyers refused to accept such bags.

South Indian Sugar Mills Association stated that their bulk consumers, "like Pepsi Coke, Britannia ITC, Nestle, Nestle, Britannia... do accept sugar in bags made of jute due to contamination, food safety, and hygiene risks."

India, with an estimated 28 millions tons of sugar consumption, is the largest consumer of sugar in the world.

Modi has long been a supporter of rural and traditional sectors. He has also spoken out in favor of protecting the jute sector. He said that in 2023 such "reservation standards" for jute packing contributed to "revitalising the sector" and helped farmers.

(source: Reuters)