By Bernama,
New Delhi : Indian silk industry with an annual business of over Rs.100 billion has been hit hard by last month’s earthquake in China with hundreds of factories being closed down, said Press Trust of India (PTI).
The industry claimed that hundreds of manufacturing units in Varanasi, Bangalore, Madurai, Coimbatore and Bhagalpur were shut down as the raw material costs of silk went up by up to 40 percent and over 1,00,000 persons engaged in the sector have lost their jobs after the earthquake in Sichuan province of China.
Sichuan is the primary supplier of raw silk yarn and dupion to Indian manufacturers of silk products. Most of the mulberry gardens have been destroyed due to the quake, which has led to a sharp fall in production in India.
“The earthquake and subsequent floods in Sichuan has affected the import prices of raw material, which have gone up by about 30-40 percent,” Indian Silk Export Promotion Council Chairman T.V. Maruthi said.
Further, he said, the industry was also hit by increasing transportation costs due to hike in fuel prices apart from labour and other costs.
The Council has approached the Textile Ministry seeking abolition of 31 percent duty on imports to save the industry from the crisis, pointing out that the industry was already hit by about 12 percent rupee appreciation against dollar last year.
Official sources said silk garment and other products’ export target of Rs.37.70 billion was likely to fall by 15-20 percent this fiscal due to US slowdown and hike in raw material costs.
The raw silk prices have risen to US$27 per kg from 20 dollar, Maruthi said, adding that with around 31 percent customs duty, the actual landing cost for raw silk like MRS has become Rs.1,525 per kg.
The industry claims that clients in the domestic and global market are not accepting this hike, forcing large number of looms and weavers besides silk garment units to close their shutters.
“We have asked the government to import raw material at zero customs duty through the agencies like silk export promotion council and distribute it through the silk weaver societies. It will definitely give a slight relief to the importers,” Indian Silk Export Promotion Council (ISEPC) Chairman said.
Though rupee this year has depreciated by about 10 percent, but due to spurt in silk prices and borrowing costs, the industry has been not be able to revive so far, ISEPC Deputy Secretary P. Veeraragavan said.
The raw silk imports from China are expected to come down from about 10,000 tonnes annually to about 7,000-8,000 tonnes, Maruthi added.