Most of the jute mills of India are concentrated in the Hugli basin in West Bengal. It is a 98 km long and 3 km wide belt along the Hugli river.
Following are the main reasons for this.
(a) Proximity to the jute producing areas of Ganga-Brahmaputra basin. West Bengal is the leading producer of raw jute in the country and provides the mills with the required raw material.
(b) Abundant water for the processing of raw jute.
(c) Cheap water transport, supported by a good network of railways and roadways, facilitates the movement of raw materials to the mills.
(d) Cheap labour from West Bengal and the adjoining states of Bihar, Odisha and Uttar Pradesh.
(e) Banking and insurance facilities available in the city of Kolkata.
(f) Port facilities in Kolkata for the export of jute goods.
Following are the challenges faced by the jute industry in India.
(a) Stiff competition from synthetic substitutes in the international market.
(b) Competition from other jute goods producing countries like Bangladesh, Philippines, Thailand, Egypt and Brazil.
(c) Decrease in demand for packing materials, jute carpets and high cost of production.
(d) Old and inefficient machinery.
The government has taken several measures to boost the production of jute goods in order to face the competition from synthetic fibres and from other countries producing jute. In 2005, the National Jute Policy has been formulated with the objective of expanding quality production and increase in use of jute. The policy of the mandatory use of jute packaging has resulted in the increase of internal demand of jute in recent years.