By Aditya Kalra
NEW DELHI (Reuters) – In India, the world’s largest consumer of sugar, the federal government and producers have locked horns in court over a contentious issue: jute bags.
Prime Minister Narendra Modi’s government has been tightening enforcement of a 1987 law, which obliges sugar mills to pack 20% of their supplies in jute bags or face fines for non-compliance, in a bid to support the traditional fibre industry.
The law now faces a legal challenge from Indian sugar mills, which say using jute bags each year costs them an additional $76 million compared to recyclable plastic ones. They also argue the fibre bags also increase the risk of sugar contamination, previously unreported court documents show.
The Indian government says contamination concerns are unfounded as jute bags are more robust and pest resistant than recyclable plastic packaging, its court filing shows. It also told the High Court in Karnataka that the law was a “welfare legislation” important to safeguard the traditional industry which supports 4 million agricultural families.
The lawsuits mark the latest tussle between big companies and Modi’s government. Global and Indian electronic companies, including Daikin and Samsung, are separately fighting Modi over moves to regulate how much they must pay for e-waste recycling.
The filings related to the lawsuit which started in August are not public and were reviewed by Reuters this week. The Karnataka High Court is set to start hearing final arguments in the case on Wednesday, with a ruling expected in coming weeks.
In December, one letter shows, the government warned sugar mills non-compliance with jute packaging rules will “be viewed seriously and strict action will be taken”.
The sugar industry group and India’s government did not respond to Reuters queries.
Sugar producers said in the court filings that jute bag rules were also a spoiler for business, with many buyers reluctant to take such bags.
The South Indian Sugar Mills Association said that its bulk consumers “like Pepsi, Coke, Britannia, ITC, Nestle … do not accept sugar in jute bags due to quality, contamination, hygiene and food safety risks.”
With an estimated 28 million tons of consumption, India is the world’s biggest sugar consumer ahead of China.
Modi, a longstanding supporter of traditional and rural sectors, has been vocal about protecting the jute industry. In 2023, he said such “reservation norms” for jute packaging contributed towards “revitalising” the sector and helped farmers. (This story has been corrected to remove the reference to court, to clarify that Samsung is not suing the government, in paragraph 5)
(Reporting by Aditya Kalra; Additional reporting by Mayank Bhardwaj; Editing by Tomasz Janowski)
