The first jute mill was set up near Calcutta, as early as 1859. Being an export oriented industry, it had expanded very swiftly. After partition of the country, most of the mills remained in India, but 3/4th of the jute producing area went to Bangladesh. In 1950-51, production of jute was 3.3 million bales (or 180 kg each). By 1996-97 it had risen to 9.75 million bales. India is the 2nd largest exporter of jute goods. The jute industry has nurtured 250,000 labour and 4 million jute farmers.

The industry at one time earned respectable foreign exchange. Today it has to come face to face with umpteen challenges One is the downslope in demand for jute carpets and packing materials. Soaring costs and potent international competition in export market make up the other problems. Above all unreal substitutes- both at home and export markets, are presenting a biggest challenge ever. Its export profits are inclusive under the textile industry.