Higher Duty On Chinese Silk Urged
With silk production in the country set to touch record levels in 1998, domestic producers have called for higher duty on raw silk imports from China.
Karnataka has reported an output of 9,325 metric tonnes in 1997-98, an 11 per cent increase over the 1996-97 level of 8,327 tonnes.
Producers say that with production increasing considerably, the government should now impose stiff duties to discourage imports. At present, imported silk from China is available at Rs 600 less than Indian silk.
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India's production last year was 14,200 metric tonnes of raw silk, while the domestic demand is around 20,000 tonnes. The handloom sector's demand for silk is around 15,000 tonnes which can be met by domestic production. But it is the requirement of the powerloom sector that has to be met by imports.
"China is dumping silk into India because its export and domestic markets are drying up. It has not cut its production which is 70,000 tonnes. Therefore, it is willing sell at lower prices," director of sericulture, Karnataka, R B Agwane said.
Most of the domestic producers are based in Karnataka which accounts for 65 per cent of India's silk production.
The state doles out subsidy worth Rs 15 crore to the silk farmers and also buys their produce through the sericulture department.
According to existing regulations, said Agwane, exporters can import 1.5 kg of raw silk yarn for every 1 kg of export, without paying import tax. This 1.5 kg is to be used for exports, but as the quality of the silk that China exports is not its best, Indian exporters use 60 per cent of Chinese silk with 40 per cent of Indian silk to make their unique blend.
"The 40 per cent of Chinese silk the exporter is left with enters the domestic market at rates lower than Rs 1400, which is the price of 1 kg of Indian silk. This affects the local producers as prices are pushed down. Silk is also being smuggled into India in large quantities," he said.
Though imports should be allowed to meet demand, feel the producers, there should be duties on imports so that they do not replace and drive the domestic produce from the market.