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In order to mitigate the problem faced by the small and traditional weavers in handloom and powerloom sector, the Ministry of Textiles decided to intervene and took the initiative to augment supply of quality raw silk to the weavers at a stabilized price through duty free import of Raw Silk of 3 A grade and above, while protecting the interests of Cocoon producers and silk reelers in India.
On the request of Ministry of Textiles, the Department of Revenue has issued a Notification No. 80/2010-CUSTOMS dated 10th August, 2010 to allow duty free import of 2500 MT of raw silk 3A and above through National Handloom Development Corporation against certification by Ministry of Textiles.
Current production of raw silk in India is about 19000 MT against a total demand of approximate 29000 MT. The deficit is met by importing raw silk, mainly from China, at basic custom duty of 30%. The demand supply gap in India, both in terms of quantity and quality of raw silk is likely to continue, in spite of increase in domestic production of raw silk in 2009-10, till full benefits of R&D efforts and extension work start showing up in significant increase in production.
At the same time, the supply chain of raw silk, particularly imports, on which large number of weavers from non-silk growing states, is controlled by few large traders who manipulate the prices in the market irrespective of global price. Global prices of raw silk have witnessed significant volatility in last one year putting a lot of strain on the weaving communities in traditional weaving centres such as Banaras, Kancheepuram etc.
The procedural modalities for procurement and pricing of raw silk are under formulation for distribution of raw silk to handloom and powerloom weavers. An appropriate pricing and monitoring mechanism will also be put in place to protect the interests of all stakeholders, including the cocoon rearers and silk yarn producers in India.
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