The recent decision by the Union government to allow duty-free imports of raw silk and silk cocoons is likely to reduce the price of raw silk in the domestic market by 50 per cent, according to a senior official from the department of Textiles.
Speaking to Business Standard on the sidelines of Silk Mark Expo – 2010 K K Shetty, deputy secretary (Tech), Central Silk Board (CSB), said, “The import would be worth around Rs 450 crore and it will stabilise the price of silk in the domestic market.”
He noted that price of raw silk has increased to Rs 3,000 per kg from Rs 2,000 a kg a few months ago and the silk cocoon prices increased to Rs 300 per kg from Rs 200 per kg.
“The price increase was mainly due to the increase in raw silk prices in China,” Shetty said, noting that the price of raw silk imported from that country increased to Rs 2,400 a kg from Rs 1,800 a kg in the last one month.
In August this year, the government has allowed the National Handloom Development Corporation to import 2,500 metric tonne of silk raw materials of 3A grade from China with duty exemption, which according to Shetty is a temporary arrangement.
“The suppliers are being finalised through a bid and the silk consignments are expected to arrive at Chennai port within two months,” said Shetty. The landed cost of imported raw silk will be around Rs 1,800 to 1,900 per kg, he said.
Currently, the Indian silk industry is estimated to be around Rs 15,000 crore, of which around Rs 3,000 crore comes from exports. Shetty noted that the domestic demand is estimated to be around 29,000 metric tonne, while the production is only around 19,000 MT, with the difference being imported from China.