Most of the jute mills of India are concentrated in the Hoogli basin in West Bengal. It is a narrow belt 98 km long and 3 km wide along the Hoogli river. The factors responsible for the localisation of the jute industry in this region are as follows : (i) 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. (ii) Abundant water for processing of raw jute. (iii) Cheap water transport, supported by a good network of railways and roadways, facilitates the movement of raw materials to the mills. (iv) Cheap labour from West Bengal and adjoining states of Bihar, Orissa and Uttar Pradesh. (v) Banking and insurance facilities from city of Kolkata. (vi) Port facilities of Kolkata for export of jute goods. Challenges faced by the jute industry are as follows : (i) Stiff competition in the international market from synthetic substitutes. (ii) Competition from other jute goods producing countries like Bangladesh, Philippines, Thailand, Egypt and Brazil. (iii) Decrease in demand for packing materials and jute carpet, and high cost of production. (iv) Old and inefficient machineries. To face the competition from synthetic fibres and other countries producing jute, government has taken measures to boost up production of jute goods. In 2005, the National Jute Policy was formulated with this objective. Government policy of mandatory use of jute packaging has resulted in the increase of internal demand of jute in recent years.