Home / Knowledge / News / Silk / Raw silk prices up 87%. Sector demands abolishing duty
Raw silk prices up 87%. Sector demands abolishing duty
13
Dec '10
Mr GK Kediya
Mr GK Kediya
All over the world, custom duty is lower on raw material & higher on finished goods, so that cost of domestic production is lower than imported products. Then only, is it possible to compete with imported products.

Unfortunately, polices of the Government of India are contrary, when considered in the case of the silk sector. While, custom duty on raw silk is 30 percent, that on silk fabric is only 10 percent. As a result, China is exporting silk fabrics to India at a price which does not cover even the cost of raw silk consumed, even when not considering, manufacturing expenses & profit.

It is China's policy to monopolize export market of silk fabrics and with that strategy in mind; it is regularly increasing the price of raw silk, making it beyond Indian exporters to export silk fabrics and whose exports are now marginal. Chinese raw silk which was available at Rs 1750 per kg in August 2010, which is now available at over Rs 3275 per kg on December 9, up an astounding 87 percent, in a matter of four months. Raw silk booking price from China has leapfrogged to US $54 per kg on December 9 against $40 per kg in September, due to which current cost of imported raw silk stands at Rs 3260 per kg.

On the recommendations of the Union Textiles Ministry, the Department of Revenue had authorized National Handloom Development Corporation (NHDC) on August 8 to import 2,500 tons of raw silk, duty free, which NHDC has not imported till date, which is the main reason for this exorbitant rise in prices of raw silk and if they import now, they will have to pay more than $54 per kg against less than $40 per kg prevailing at that time.

There are 150,000 powerlooms & 50,000 handlooms in Varanasi district alone, engaging 250,000 weavers. On November 28, all handlooms & powerlooms went on a one day token closure and a very big rally & meeting of over 50,000 weavers & traders was held. Their firm demand was abolition of custom duty on raw silk. The moot question that arose in those present at the rally is, as to why is the government averse to abolishing custom duty on raw silk?

Speaking to fibre2fashion, Mr GK Kediya, Convener-Yarn Development Committee, Banarasi Vastra Udyog Sangh said, “The policies of the government are based on based on false presumptions & fallacies. It is wrong to suggest that, cheap Chinese yarn will affect adversely domestic raw silk producers. Domestic raw silk is no substitute for Chinese yarn because, denier (thickness) of Indian yarn is not uniform, due to bad quality of cocoons & obsolete reeling machines, so using Chinese raw silk is a must.

“The Indian produced raw silk cannot be used in raw form. Only Chinese raw silk can be used without twisting and is used totally on powerlooms in Varanasi without twisting. Cheap or costly, domestic raw silk is no substitute for Chinese raw silk & there is no competition between the two as their end uses are different.

The Indian domestic raw silk producers keep their prices in parity with the Chinese raw silk. A 65 percent increase in Chinese raw silk price has resulted in same increase in the domestic raw silk prices. Both producers of cocoon & reelers are reaping rich harvest without any increase in their cost of production, which is pure profiteering. As such it is wrong to presume that, abolition of custom duty on Chinese raw silk will adversely affect domestic producers & reelers.


Must ReadView All

Courtesy: Michael Kors

Fashion | On 25th Jul 2017

Michael Kors to acquire Jimmy Choo

Global fashion luxury brand Michael Kors Holdings Limited has reached ...

Apparel/Garments | On 25th Jul 2017

VF Corp posts $2.4 billion revenue for Q2 2017

VF Corporation has recorded revenue of $2.4 billion, up 2 per cent,...

Textiles | On 25th Jul 2017

Egypt signs agreement with UNIDO for cotton production

Egypt has signed a €1.5 million ($1.74 million) cooperation agreement ...

Interviews View All

Saket Garg
Garg Corporation

The biggest challenge is lack of skilled workforce and competition from...

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X