Southern States - Karnataka

Chinese silk flooding local market

By Laiqh A. Khan

MYSORE March 2. Even before the State Government could enact the proposed amendments to the Karnataka Silk Act aimed at liberalising the silk trade in the State, the enforcement activities of the Sericulture Department are believed to have been suspended, leading to the unrestricted availability of imported Chinese silk in the open market.

Though the State Government has plans to deregulate the silk trade, the existing provisions of the Silk Act, which restrict silk trade to government-run silk exchanges and cocoon markets, are still very much in place. Until the amendments to the Act are passed by the Legislature and approved by the Governor, the Sericulture Department has to control the silk trade through its enforcement activities, which include inspection and checking any kind of activity in the silk market.

But the Sericulture Department, in anticipation of the proposed amendments, has relaxed its enforcement functions, leading to the easy availability of "smuggled" Chinese silk in the market, according to the President of the Karnataka Sericulturists' Welfare Association, S.S. Sadanand.

When indigenously-reeled local silk costs Rs. 1,000 to Rs. 1,100 a kg., Chinese silk, which is indisputably of superior quality, is available for Rs. 900 to Rs. 950 a kg. "Due to the suspension of enforcement activities, Chinese silk, which smuggled in through Nepal and Bangladesh, has found its way to markets in Karnataka," Mr. Sadanand said.

The falling price and the absence of demand for indigenous silk had left domestic reelers worried, he said. The reelers were finding it extremely difficult to dispose of their silk in the face of stiff competition from Chinese silk, and had to settle for a very low price. Also, the demand for indigenous cocoons had fallen considerably, he said. Due to the fall in the price of silk, the reelers were bidding very low rates for cocoons in the local markets. "The price of superior quality bivoltine cocoon, which used to range from Rs. 200 to Rs. 220 per kg., has fallen to Rs. 150 now," he said.

Local silk is no match for the superior quality Chinese silk. Besides, the cost of production of silk is lower in China, experts point out.

Mr. Sadanand, who is a retired Joint Director of Sericulture, said the Union Government, in order to protect the indigenous variety of silk, had provided tariff protection for the past 50 years. The import of Chinese silk had been restricted to protect the domestic sericulture industry. "The Government of India allows the import of silk only to the extent of meeting the demand for manufacture of export quality silk fabric," Mr. Sadanand said.

Meanwhile, the State Government proposes to amend the Karnataka Silkworm, Cocoon and Silk Yarn (Regulation of Production, Supply, Distribution and Sale) Act, 1959, with a view to liberalising the silk trade. The amendments are aimed at deregulating the sale and purchase of silk yarn and cocoons. The State Government is of the opinion that a major portion of the silk marketing activity will remain within the State if the restrictions on silk yarn transactions are done away with.

The deregulation and liberalisation measures are being considered to prevent silk marketing activities from shifting to other States due to absence of government control on silk transactions in those States.

Karnataka is a major player in the country's silk industry, accounting for an annual production of as much as 8,500 tonnes, and providing employment to about 20 lakh people, directly and indirectly.

But, the Karnataka Sericulturists' Welfare Association has urged the Government to reconsider its proposal to liberalise silk trade in the State. "It is necessary to enforce full control on silk trade if the flow of smuggled Chinese silk into the State is to be prevented," Mr. Sadanand said.

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