Indian Sericulture Farmers Seek Import Duty Cut

Sericulture farmers in Karnataka, which accounts for 60% of the country's silk production, have appealed to the Union government not to reduce import duty on Chinese raw silk as it would affect the domestic silk farmers and production.

"It is understood that there is a move by the union government to reduce the import duty on raw silk from around 30% to 10%. This will affect the domestic farmers and prices of both the cocoons and raw silk produced locally will collapse," Munisonappa, president of Reshme Belegarara Abhivrudhi Sangha, an association of sericulture farmers in Kolar district, told FE.

The domestic silk prices collapsed during 1999-2002 due to dumping of Chinese raw silk. Following this, the union government has imposed anti-dumping duty for five years on Chinese raw silk at $27.97 per kg in 2002-03. After this, the local raw silk price had jumped to R1,500 per kg from Rs 800 per kg. The government has extended the same duty structure from till 2009.

Further the Union government has imposed enhanced anti-dumping duty indicating a reference price of $37.32 per kg on raw silk of 2A grade and below from January 2009 to 2014. The Union government has also imposed anti-dumping duty on Chinese silk fabric during November 2006 on fabric weight ranging 20-100 gm/metre indicating a reference price ranging between $1.66 – 4.55 per metre. The duty imposed on fabric will be in force till April 2011. As a result of duty on silk fabric, the silk weaving units, which were closed, have started functioning again.

"If the government takes any steps to reduce the duty on raw silk, it will affect 70 lakh people involved in silk industry in the country, Mallur Shivanna, president of Chikkaballapur District Sericulturists Welfare Association said.

Out of 70 lakh people in the silk industry, 5-lakh people are sericulture farmers and the rest are other stakeholders such as reelers, twisters, weavers and printers etc. In respect of cocoon production activities, a majority of them are marginal farmers from the weaker section. Rural women folk constitute 60% of the entire activity chain, he said. The total value of silk produced in the country hovers around R15,000 crore per annum.

The farmers said the government should keep the import duty intact to safeguard the sericulture farmers in the country. Any move to reduce import duty will not only affect the livelihood of the farmers and reelers, but will also force the country to face acute shortage for locally produced raw silk in the future, they added.