| Official sources told Business Standard that the futures trading could be introduced by the end of the year or early next year. |
| The measure is expected to increase the present annual domestic production of around 14,000 tonnes against an annual demand of 30,000 tonnes. India imports most of its raw silk from China. |
| The multi-commodity exchange has already submitted its proposal to launch futures trading in cocoon and silk yarn to the textiles ministry. |
| Futures trading will initially be started by the Central Silk Board (CSB) which will register itself as an institutional trading cum clearing member with the exchange. |
| The government will in due course constitute a Silk Futures Trading Association (SIFTA) which will then take over the activity from the CSB. |
| The decision to introduce futures trading in cocoon and silk has been taken by the textiles ministry on the basis of a study by the Bangalore-based Indian Institute of Plantation Management. |
| The report favoured futures trading in silk to take advantage of globalisation. It urged removal of protective barriers around the silk trade. |
| "Allowing futures in silk will help producers to hedge their risks since in the last few years prices of silk have been fluctuating. The price of silk in China have gone up drastically in the last few months. For instance, the price of 60 gram variety of silk gorgette used to make silk garments has gone up from Rs 105 per metre two months ago to over Rs 160 per metre at present," an official said. |
| In addition to this, the textiles ministry is also preparing a Rs 35 crore proposal to upgrade reeling technology used in the silk sector to bring Indian processes at par with the Chinese silk industry. |
| According to official sources the proposal is being formulated under the Rs 100 crore fund announced in the budget for the regeneration of traditional industries. |
| The Rs 35 crore would be utilised over a five year period. |
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