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India Minister of State Rejects Duty Increase on Silk Yarns

The Indian Ministry of Textile’s proposal to raise basic custom duties on silk yarns and fabrics was rejected last week. To protect the nation’s domestic textile industry from an influx of cheap imports, the Minister proposed increasing the existing duty from 10 percent to 15 percent. India’s Minister of State turned down the proposal in a written statement to a representative in the upper house of India’s Parliament.

Behind the Minister of State’s refusal to increase duties on this category of imported textiles is the country’s dependency on its massive silk industry and its economic importance to the nation’s economy. Imported silk products keep the nation’s looms weaving and are a major source of employment.

A recent study by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) revealed that more than 7.6 million people work in the industry in a total of 51,000 villages. More than 814,000 weavers are employed in the industry, operating more than 328,000 handlooms and more than 45,800 power looms.

Silk imports in 2012-2013 totaled $312 million, up from $124 million in 2000-2001. About 73 percent of the total in 2012-2013 is raw silk, valued on excess of $227 million.

India relies on silk imports because of domestic shortages of more than 5,000 metric tons annually, according to the study. The shortfall in silk supplies has been attributed, in part, to increased consumer spending on apparel. India’s raw silk consumption is expected to increase as the nation’s economy and per capita income continue their upward trends.