The Hindu Business Line : Silk exports post 25% growth despite strong rupee

Silk export earnings are growing steadily because of rising demand for Indian silk goods particularly from the US and the European Union in recent years.

G. Srinivasan

Advertisement

New Delhi, July 12 Despite rupee appreciation throughout last fiscal, the country’s silk exports comprising mainly natural silk, fabrics, made-ups, readymade garments, silk carpets and silk waste held the ground well as such exports registered a 25 per cent growth at $ 897.01 million in 2007-08, against $ 716.45 million in 2006-07.

Official sources told Business Line that even as the country’s single largest item in the overall textile exports, viz., cotton readymade garments including accessories posted a growth of 34.49 per cent at $9,074.10 million last fiscal ($6747.11 million in 2006-07), the readymade garment silk segment within overall silk exports logged a robust 46 per cent growth at $ 375.08 million ($ 257.22 million in 2006-07).

Rising earnings

With Indian silk goods being exported to more than 190 countries, sources said silk export earnings are growing steadily because of rising demand for Indian silk goods particularly from the United States and the European Union (EU) in recent years. However, with the slowdown of the US economy and anaemic economic growth in the European continent, the demand for Indian silk goods has distinctly declined. Sources said this was particularly evident in the initial two months of the current fiscal (2008-09) when export of natural silk yarn, fabrics and made-ups, silk waste and silk carpets all suffered serious shortfall in growth at 17 per cent, 19 per cent and 59 per cent respectively.

Readymade silk

But the silver lining is the growth registered in the export of readymade garment silk which clocked a growth of 111 per cent in April-May 2008 against corresponding months of 2007-08.

The steady depreciation of the Indian rupee vis-À-vis the dollar in most of the current fiscal has helped higher realisation to exporters, the sources noted adding that nonetheless silk readymade garments account for well-nigh one-fourth in total silk goods exports.

They are also high value-added items mostly popular in the US, UK, Italy Spain, France, Germany, Denmark, Singapore, besides Saudi Arabia and UAE.

Officials contend that India is facing formidable competition from China particularly after the quota regime was dismantled early this decade. The consistently undervalued Yuan had led to China’s unassailable market position in silk textile trade in major markets such as the US and European countries, notwithstanding the voluntary export restraints on its products slapped by the US.

Sources further noted that non-tariff barriers like formation of trading blocs like EU, NAFTA, stringent environmental regulation of the importing countries were hampering India’s silk export thrust.

They added that introduction of the silk mark scheme in June 2004 to promote the distinctive quality of Indian silk products has helped promote quality consciousness and approximately 36 lakh Silk Mark labelled products have reached the market.

Besides, the Central Silk Board Amendment Act, 2006 has focused the attention on the qualitative standardisation of the silk sector along with according greater freedom to silk farmers, reelers and weaves to sell and buy their produce in the open market, they said.

More Stories on : Silk | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Tatas plan foray in global financial services

Railways may procure bio-diesel at Rs 31.34/litre

Weekly News Round-up

Exchange-traded currency futures likely to take off by mid-August

Nuclear power prospects uncertain: Worldwatch Institute

Geojit reports 55% drop in net

Silk exports post 25% growth despite strong rupee

Institutional investors buy ‘out-of-favour’ sectors in July