The Goverment of Karnataka Demand Hike Import Duty on China's Raw Silk

Corporate Affairs Minister Veerappa Moily and other MPs from Karnataka has appealed to Finance Minister Pranab Mukherjee for increasing import duty on raw silk to protect domestic growers from cheaper Chinese shipments.

The government of Karnataka, in the last budget, had reduced customs duty on raw silk to 5 per cent from 30 per cent. "I request you (Mukherjee) to restore the customs duty of raw silk at the original rate of 30 per cent and to create a revolving fund for market intervention," Moily said in a letter to the Finance Minister.

Karnataka with an annual output of around 8,000 million tonnes is the largest producing state of raw silk. Over 11 lakh people are engaged in activities like mulberry cultivation, silkworm rearing, twisting, dyeing and weaving in the state.

Earlier in 2003, the government had imposed an anti dumping duty on cheaper imports of raw silk. Also customs duty of 30 per cent was imposed to protect farmers in Karnataka which in the last budget was brought down to 5 per cent.

After the duty reduction the price of silk yarn had crashed by Rs 700-800 per kg impacting negatively cocoon prices. Moily also appealed to take appropriate steps to reduce dependency on imported silk from China.