Union Budget 2021-22 has sought to increase the import duty on raw silk, providing some much-needed relief for sericulture farmers and raw silk reelers. The customs duty on raw silk, silk yarn, and yarn spun from silk waste will go up from 10% to 15%.
“We welcome the increase. But it would have been better if the duty had been raised to 25%,” said Gautham Gowda, president of Ramanagaram District Sericulture Farmers’ Welfare Association.
For almost a decade now, sericulture farmers and reelers in Karnataka, which accounts for more than a third of the country’s raw silk production, have been demanding an increase in import duty on silk. For, the availability of superior-quality raw silk, imported mostly from China at a reasonable rate, drives down the price of indigenously produced silk, hitting both the reelers and the sericulture farmers producing cocoons.
An import duty of 30% prevailed till a few years ago. It was slashed to 5% about a decade ago and eventually increased to 10%. The Centre’s move to further increase the duty to 15% in 2021-22 Union Budget comes close on the heels of the difficult times that sericulture farmers and reelers of Karnataka went through because of COVID-19 in finding a market for their huge stockpile of unsold raw silk.
N.Y. Chigari, retired Deputy Director of Sericulture, Government of Karnataka, said the increase in duty would make the price of indigenous raw silk more competitive against the superior-quality imported silk. This would also help keep up the price of cocoons. The price of a kilogram of indigenous raw silk ranges between ₹2,500 and ₹3,500, depending on quality, while imported silk is available for barely ₹300 more than that. With the increase in duty, Mr. Gowda expressed hope that the difference in price would widen to between ₹700 and ₹800 a kg.
But the weavers’ community, who manufacture silk fabrics, is not too pleased with increase in duty. Karnataka Silk Weavers’ Federation president T.V. Maruti said the use of some quantity of imported Chinese silk was necessary while manufacturing silk garments meant for export. “We have to use imported silk because of its good quality. Or else, it will have an impact on our exports,” he said.