Debate Ensues Over Custom Duty On Imported Raw Silk.

VARANASI: The issue of custom duty on imported raw silk is getting serious. While some MPs from Karnataka, in favour of southern sericulture lobby, are demanding increased custom duty on imported raw silk, a Congress MP from UP, has written a letter to the Union textile minister, urging him to consider the pros and cons and enable a judicious decision which is in the interest of all parties concerned.

"We must take care of silk weavers of south but not at the cost of killing the weavers of the silk industry of Varanasi in Uttar Pradesh and other states," writes Anu Tandon (Unnao MP) in her letter (dated August 20) to Anand Sharma, the textile minister.

For the year 2010-11, the total domestic raw silk production was only 19,600MT as against the total demand of 28,634MT, therefore leading to import of additional 9,034MT of raw silk. This gap between the supply and demand has remained around 10,000 MT since 1975.

According to GK Kediya, convener of Yarn Development Committee, Banarasi Vastra Udyog Sangh, the opposition of the reduction in custom duty on raw silk imported from China by sericulturists and reelers of Karnataka is not right. "The domestic raw silk producers are reaping rich harvest by keeping their prices only slightly below the market price of Chinese raw silk. This is pure profiting and an act of depriving weavers, specially in handloom sector. They are opposing the reduction of custom duty on imported raw silk as it will bring down its price and they too will have to reduce price. Instead of opposing it, they should increase production so that the gap of 10,000 MT between production and consumption can be bridged," Kediya said.

Narendra Kapoor, a local exporters and former president of Eastern UP Exporters Association (EUPEA), said there would be no need of importing raw silk from China if the quantity and quality of domestic silk were enhanced.

Tandon told TOI over phone on Wednesday that the argument given was that silk growers and reelers had an apprehension that huge imports of Chinese silk at reduced custom duty would give competition to domestic silk. Large scale dumping of duty free Chinese silk would injure the domestic sericulture in India. "In my opinion, this argument seems one-sided and does not take into consideration the larger interest of the traditional silk weaving industry / handlooms. Even the sericulturists won't flourish if our weavers switch to synthetic yarn or leave this traditional industry for good," she said.

She further stated that during the last general budget finance minister had announced the reduction of custom duty on raw silk from the then existing rate of 30% to 5%. This important step led to the revival of weaving industry, especially in Varanasi. The reduction in custom duty led to normalisation of raw silk price from over Rs 3,000 to Rs 2,300 (now). "The five per cent basic custom duty at the current price of raw silk will keep a reasonable cushion for our producers of raw silk and there is really no need for any opposition or panic," she claimed.

"I suggest that the Central Silk Board and Textile Ministry should take all necessary steps to increase domestic production and thus bridge the gap between production and demand of raw silk. This changed scenario shall lead to total independence from import of raw silk from China and other countries. Till then it is necessary that we support our traditional silk weavers/ handlooms by importing the balance requirement of raw silk from China at reduced or nil duty," she said.

Source : timesofindia.indiatimes.com