Bangalore: India has failed to control imports of silk from China despite imposing anti-dumping duty on both raw silk and silk fabric. The country imported silk items like raw silk, silk yarn and fabric worth Rs 1,713 crore in 2008-09, up from Rs 1,597 crore in the previous fiscal. In value terms, raw silk imports increased to Rs 900 crore in 2008-09 from Rs 734 crore a year ago.
In addition, India imported silk yarn and fabrics worth Rs 812 crore primarily from China during 2008-09. In terms of volume, India's total raw silk imports increased to 8,369 tonne in 2008-09 from 7,922 tonne a year ago. Of this, a major chunk of 8,297 tonne was imported from China, up from 7,840 tonne in the previous fiscal.
Besides China, India imported a minuscule amount of 72 tonne of raw silk from Uzbekistan, Brazil, Hong Kong, Vietnam and a few other countries.
In fact, India could not bring down imports of Chinese silk, as the gap between domestic silk production and demand for silk-based products widened. China is the only source India to meet its demand for silk.
According to H Hanumanthappa, chairman of the state-owned Central Silk Board (CSB), an apex body the Indian silk industry, the Centre had imposed an anti-dumping duty on Chinese raw silk for five years--from 2003 to 2008--to safeguard the interest of domestic sericulture farmers and weavers. The anti-dumping duty was imposed on the basis of landing price of $27 per kg till January 2008. The same slab continued when the government extended the anti-dumping duty till January 2009. With the intervention of the CSB and other industry players, the government has further extended the anti-dumping for five years from 2009 by increasing the slab to $37 per kg, said Hanumanthappa.
An anti-dumping duty on silk fabric was also imposed for five years from 2006. He said the country is facing shortage of around 8,000-9,000 tonne, and depends on China to meet its demand.
Utilising this opportunity, China was dumping silk items in India at cheaper cost, forcing local silk farmers to sell their produces at costs lower than China's. Imposition of the anti-dumping duty has saved local farmers were saved, Hanumanthappa said.
But, on the other hand, silk exporters from India said that the government's anti-dumping duty has boomeranged badly on local silk weavers and exporters. Because of the duty, prices of raw silk, main raw material for any silk product, have currently increased to $32- $37 in domestic market from $12-$13 in 2003. As a result, prices of finished goods have also resen, affecting the country's silk exports.
The textile ministry had set a target to export silk items worth Rs 3,970 crore during 2008-09 against Rs 2,727 crore during 2007-08. However, exports were at only Rs 3,165 crore in 2008-09. According to experts, the only way to come out from this crisis is to increase domestic silk production. But, instead of hiking domestic output, the Centre has imposed an anti-dumping duty on Chinese silk imports, they said
Source : Financial Express