The Ministry of Textiles has extended the compulsory 100 per cent jute packaging for foodgrains and 20 per cent of the total sugar production upto December 31, 2024.

Issuing an order, the ministry also clarified that procurement of jute bags for packaging of initially 10 per cent of the foodgrains through reverse auction on the Government e-Marketplace (GeM) portal will continue, subject to the Calcutta High Court passing its final order on the matter.

“Subject to the outcome of sub-judice matter pending in High Court of Calcutta, initially ten per cent of the indents for foodgrains are to be placed through reverse auction on the Government e-Marketplace (GeM) portal.” the Ministry of Textiles stated in its order dated October 1.

Despite an ongoing legal battle, the order related to continuation of the reverse auction on the Government e-Marketplace has heightened concerns among the jute industry stakeholders.

Notably, the ministry, in its notification dated December 26, 2023, mandated 100 per cent jute packaging for foodgrains and 20 per cent of the total sugar production until June 30, 2024. It also introduced the reverse auctions for jute bag procurement through the GeM.

But the reverse auction system has faced backlash from jute mill workers and farmers. Concerns arose from trade unions and jute mills about the reverse auction’s impact on wages, pricing, and livelihoods. These issues particularly affected workers and farmers who depend on the current procurement system.

The West Bengal Permanent Jute Workers Union filed a petition in the Calcutta High Court, challenging the introduction of policy of the Central Government for procurement of jute bags for packaging of food grains through the Government e-Marketplace (GeM) portal.

In response to the petition, the High Court issued an interim stay on the GeM reverse auction procurement of jute bags.

“Considering the entire facts and circumstances of this case, till the matter be resolved, the respondent authorities are hereby restrained to initiate the procurement of the jute materials/jute bags through GeM portal till the adjourned date,” Justice Subhendu Samanta said in his order on September 20.

The matter is scheduled to appear before the court for further hearing on November 29.

Significantly, in a ruling providing relief to the jute industry, a division bench of the Karnataka High Court last month quashed the order of a single judge bench, which had granted an interim stay on the notification issued by the Centre mandating 20 per cent of sugar production be packaged in jute bags.

In an interim order, the Karnataka High Court single-judge bench had stayed the Government notification dated December 26, 2023, after the South Indian Sugar Mills Association filed a writ petition to set aside the notification.