In all parts of the world, the tariffs on raw materials are low, and the tariffs on finished products are relatively high. Therefore, domestic production costs are lower than imported products. Only in this way can it be possible to compete with imported products.

Unfortunately, the Indian government’s policy on the implementation of silk is exactly the opposite. The raw silk tariff is 30%, and the silk fabric tariff is only 10%. Therefore, China exports silk fabrics to India at a price lower than the cost of raw silk, and does not even consider production costs and profits.

China’s policy is to monopolize the export market of silk fabrics. For this purpose, China regularly raises the price of raw silk so that Indian exporters cannot export silk fabrics, and the export profits of Indian exporters have been very weak. In August 2010, the price of raw silk in China was Rs 1,750/kg, and by December 9, the price was more than Rs 3,275/kg, an astonishing 87% increase in only four months. The price of raw silk imported from China was US$40/kg in September and US$54/kg on December 9th. Therefore, the current cost of raw silk imported from India is Rs 3,260/kg.

According to the proposal of the Federal Ministry of Textiles, the taxation department approved the National Handloom Development Corporation (NHDC) to import 2,500 tons of raw silk on duty on August 8. However, NHDC has not been imported so far, mainly because the price of raw silk soared if they now Imports have exceeded US$54 per kilogram, and the price at that time was less than US$40/kg.

In Varanasi alone, there are 150,000 power looms and 50,000 hand-held looms, employing 250,000 people. All power looms and handlooms were discontinued on November 28th, and more than 50,000 workers and businessmen held a big show. They strongly demanded the withdrawal of raw silk import tariffs.

According to industry experts, India imports only 21% of the raw wire tariff, while the raw silk import tariff is 30%. This abnormal tariff structure should be corrected.

In 2009-10, India even imported raw silk from countries that did not produce silk, such as Brazil (69 tons), Uzbekistan (82 tons), Iran (29 tons), South Korea (16 tons), Vietnam (46 tons), total 242 T, while imported only 75 tons in 2008-09. Just because there are no customs duties on imported raw silk from these countries, Chinese raw silk is exported to India after being repackaged in these countries.

In 2008-9, 8392 tons of raw silk was imported, worth 380 million US dollars (1.7 billion rupees). However, in the same amount in 2009-10, only 7,340 tons of raw silk was imported because the price increased. In 2010-11, the same amount of imports will be even smaller because the price of raw silk has increased by 65-70%.

Industry experts suggest that tariffs on raw silk should be eliminated, and the tariff on silk fabrics should be raised to 40%. The National Handloom Development Corporation (NHDC) should immediately import 2,500 tons of duty-free raw silk.

If the Indian government does not give priority to taking corrective measures, the world’s largest household industry will suffer the catastrophe.