Home / Knowledge / News / Textiles / 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

Textiles minister Smriti Irani lighting the lamp to inaugurate the 6th edition of the International Apparel and Textile Fair ‘VASTRA 2017’, in Jaipur. Courtesy: PIB

Textiles | On 22nd Sep 2017

Placement rate in textiles sector is 70%: Indian minister

The recent high growth of foreign direct investment (FDI) in the...

Apparel/Garments | On 22nd Sep 2017

New US FTC rule for RN used on textile product labels

The US Federal Trade Commission recently streamlined requirements...

Textiles | On 22nd Sep 2017

Messe Frankfurt acquires Source Africa, ATF textile shows

Messe Frankfurt, one of the world´s leading trade show organisers,...

Interviews View All

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Yash Maniyar
Rekha Maniyar

Indian fashion market is growing at a staggering rate

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Nisha Chanda
Whistling Woods International School of Fashion

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

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

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

September 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

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

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

Yes No

Active Poll

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

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

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

Yes No

Active Poll

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

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

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

Active Poll

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

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


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