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Sunday, Dec 22, 2002

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Industry & Economy - Anti-dumping
Agri-Biz & Commodities - Silk

Dumping duty on raw silk imports recommended

G. Srinivasan

NEW DELHI, Dec. 21

THE Designated Authority in the Commerce Ministry has recommended imposition of provisional anti-dumping duty on imported mulberry raw silk (not thrown) from China, even as import of raw silk has been liberalised, increasing the availability of good quality silk.

In its preliminary findings issued on Friday to be gazetted shortly, the Authority has held that mulberry raw silk (not thrown) originating in or exported from China has been exported to India below normal value, resulting in dumping. The domestic industry has suffered injury that was primarily caused by imports from China. Accordingly it is proposed that provisional anti-dumping duty be imposed on imported raw silk (not thrown) from China with the anti-dumping duty being recommended is the difference between $33.19 per kg and the landed value of imports.

All cottage/filature/multi-end silk reelers located in Karnataka, Tamil Nadu and Andhra Pradesh through their associations have filed the petition. These States produced 6,546 tonnes of silk in 2000-01 and 5,663 tonnes in 2001-02. Dumping investigations were carried out for the period April 1, 2001 to March 31, 2002. The quantum of imports from China rose from 3,161.346 tonnes in 200-01 to 5,075.862 tonnes in 2001-02 with the increase in the total imports of mulberry raw silk from China being 60.57 per cent in the period of investigation (PoI) compared with the quantum of imports in 2000-01. The share of China in total imports was 91.68 per cent in 2000-01 and 93.93 per cent in 2001-02. The petitioners have adopted new bivoltine technologies based on new high yielding variety mulberry and bivoltine silkworm races resulting in enhanced productivity and quality silk of international grade.

Hence at this critical juncture, the domestic sericulture industry is saddled with large scale dumping of Chinese raw silk at prices "which are inexplicably low when compared to earlier years and in the process causing severe injury to the silk reelers producing raw silk", the

Authority said, adding thus: "the continued dumping of Chinese mulberry raw silk in India is likely to negate the research breakthroughs achieved and the huge investments made and force the reelers into debt traps".

The Authority held that the sales of petitioners had slumped from 6,546 tonnes in 2000-01 to 3,397.8 tonnes during the PoI, which was a huge 48 per cent fall.

While the share of domestic industry in demand, which was, 61.39 per cent in 2000-01 declined to 35.85 per cent in 2001-02 (PoI), the share of dumped imports during this period rose from 29.64 per cent to 53.55 per cent, the Authority stated.

The Authority added that while the sales quantum of domestic producers has fallen, the share of imports from China has increased. The landed values of the subject goods from China have undercut the average selling price of the domestic industry. Thus "there is both volume and price effect of dumped imports" of mulberry raw silk from China.

The stocks of the subject goods with the domestic producers had increased from roughly 10 per cent in 2000-01 to 40 per cent in 2001-02. During 2002-03, the raw silk prices further plunged and most of the multi-end/cottage basins are only running at 60 per cent capacity and many are closed. Most of the silk produced by the units are lying unsold due to easy availability of Chinese raw silk at low prices.

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