Within a week of coming back from China, Prime Minister Manmohan Singh chaired a meeting attended by Jammu and Kashmir Chief Minister Ghulam Nabi Azad and Home Minister Shivraj Patil along with other top officials on special packages for the strife-ridden border state that goes to polls this year. Now, his Government has to take a call on a matter that affects the J&K economy as well as attempts at reviving its historic “Silk route” ties with the People’s Republic of China. The falling dollar has delivered a double whammy to the traditional Jammu and Kashmir silk industry that makes a quarter of India’s total output of superior quality “bivoltine” silk. While silk export has dipped sharply than other textiles in 2007-08 (25.1 per cent in rupee terms in the first five months), Chinese raw silk has flooded the domestic market this year at rates considerably lower than the production cost in India. Worried, J&K’s sericulture department has written to the Centre for revising the anti-dumping duty imposed on Chinese raw silk imports. It’s not alone. Karnataka, Andhra Pradesh and Tamil Nadu have also sought an extension of the anti-dumping duty for five years and a revision to the extent of the rupee’s appreciation vis-a-vis the dollar. A senior official of the Central Silk Board told The Indian Express from Bangalore, “India is the highest consumer of silk in the world and our domestic production is unable to meet demand, so imports are always welcome. The only issue is the price of imported silk. If it’s cheaper than Indian silk, it affects the tribals and the weaker sections of society that are predominantly active in the Indian silk industry.” The anti-dumping duty on raw silk is based on a reference price of US $27.97 per kilo — if silk is invoiced at a lower rate inclusive of the 30 per cent custom duty, the importer has to pay the difference in price as duty. After it lapsed on December 31, 2007, it has been extended for one year, pending investigation. “Chinese raw silk that was coming in at a price of Rs 1,500 per kg till about a year and a half ago, is now selling at Rs 1,150-1,200 per kg. With our average silk farmer’s landholding at less than 0.5 acre, our production cost is close to Rs 1,400. The dollar’s decline has rendered the anti-dumping duty redundant. We have asked the Ministries of Textiles and Commerce to intervene,” the official added. Bilal Ahmad Kawoosa, whose family has been in the silk business since it extended “overdraft facilities to the maharajahs” and who is a member of the Kashmir Chamber of Commerce, says, “Raising the anti-dumping duty is imperative if the Government doesn’t want us to shut shop this year. But more importantly, the business needs to be freed from overt government control right from the seed stage. Given a freer regime, we are confident of increasing productivity as well as quality.” Incidentally, the Eleventh Plan aims at giving a major thrust to bivoltine silk, aiming to raise production to 5,000 metric tonnes per annum from the current 1,000 metric tonnes. Apart from Jammu and Kashmir and the southern states, Gurdaspur in Punjab and Maldah district in West Bengal also specialise in bivoltine silk production. “Many commodities had been primarily imported from China but over the period we have become entirely dependent on China for import of these commodities. China’s share in India’s imports of raw silk and woven silk fabrics has increased from 93.5 per cent and 85 per cent in 2001-02 to 97 per cent in 2006-07, respectively,” said a recent study.
