India's silk industry fights against rising China imports

Sribhas Chandra Supakar, a Varanasi-based textile designer, hopes India will soon stop importing raw silk. "Whenever there is a spurt in prices of imported raw silk, it impacts prices of domestic silk as well," he says. "If we can eliminate imports, this volatility will end."

That wish may come true within a few years. The silk industry in India, with a 15 per cent share of global output, is seeing a 'swadeshi' movement. Over the past five years, domestic production of raw silk has risen about 30 per cent to 23,679 metric tonne in 2012/13 from 18,320 tonne in 2007/08. Imports of raw silk fell 38 per cent to 4,951 tonne from 7,922 tonne during the same period. The trend continues in the current fiscal year as well, with imports in the first six months (April-September 2013) touching just 1,175 tonne. India imports mostly from China, which has a share of nearly 82 per cent in global output.

"We aim to eliminate silk imports and make India self-sufficient by 2020," says K.K. Shetty, Joint Secretary at the Central Silk Board, which functions under the Ministry of Textiles. The ministry has set a target of increasing production to 32,000 tonne by 2016/17 by growing the area under sericulture and improving productivity. Textiles Minister K. Sambasiva Rao has since raised the bar higher, saying in December that output should go up to 46,000 tonne by that time.

Shetty says domestic silk is also priced competitively. Imported silk yarn sells for Rs4,500 per kg while domestic yarn is available for Rs3,500 to Rs3,800 per kg. According to Shetty, handlooms account for about 85 per cent of silk consumption in India while powerlooms use the remaining. The country, the biggest consumer of silk globally, has now started producing the bivoltine grade of the fabric that can be used by powerlooms. "We have developed silkworm seeds that can produce silk suitable for powerlooms," he says.

One such manufacturer who uses local raw silk on his powerlooms is Thunga Ramachandra. The owner of Bangalore-based exporter Thunga Silk International says the company uses both imported and domestic silk on its 68 powerlooms. "Some of our foreign buyers have been placing orders based on samples made of domestic silk," he says.

While falling imports and rising output are positive developments, the silk industry is facing a number of challenges as well. India's silk import bill has continued to swell. The country paid Rs1,236.83 crore in 2012/13 for raw-silk imports compared with Rs734.44 crore five years before, as silk prices rose and the rupee weakened.

A weaker rupee has also hurt silk exports from the country. Shipments had already been falling since the global economic turmoil that began in 2008 dampened demand in the US and Europe, the biggest markets for Indian silk products. Export earnings slipped to Rs2,303.53 crore in 2012/13 from Rs3,178.19 crore in 2008/09. China has also made a dent in Indian exports. "Our exporters are not able to compete with China on pricing," says Shetty.

The local silk industry, like other segments in the textile sector, is also at the crossroads of technology. While a large part of the industry has shifted to powerlooms in the past two decades, handloom products are also enjoying a new lease of life. Handloom products from traditional silk pockets like Varanasi in Uttar Pradesh and Bhagalpur in Bihar have found buyers not just in India but also overseas. Yuko Matsumoto, Manager at Tokyo-based apparel and fashion retailing firm Kafka, says she flies twice a year to Varanasi to source handloom-made silk scarves and other products. The value of products sourced by Kafka from the temple town has doubled to Rs3 crore in the last two years, she says.

Supakar, the Varanasi textile designer, alleges many in the industry are selling powerloom products but calling them handloom-made. "If you make a product on a handloom that can be replicated on a powerloom, no one will buy it since a similar powerloom product will be much cheaper. Most buyers can't distinguish between the two. Price is the most important determinant," he says. A powerloom saree, for instance, sells for anything between Rs600 to Rs4,000 while handloom silk saree prices range from Rs3,500 to even a few lakh rupees.

Popular retail chains such as Fabindia and Raw Mango also source silk products from Varanasi and Bhagalpur. Niranjan Poddar, Secretary of a weavers' cooperative in Bhagalpur, says he has made scarves for well-known designer Sabyasachi Mukherjee and has supplied to Fabindia. The cooperative manages the entire production process from cocoons to finished silk products. It has more than a hundred handlooms and earns annual revenue of Rs5 crore.

Amresh Prasad Kushwaha, who runs a handloom cooperative in Varanasi, says the period between 2000 and 2010 was tough due to weak demand as buyers preferred cheaper powerloom products. In recent years, he has started working with retail chains such as Fabindia, which give him designs and specify a price range for handloom products. His cooperative has around 50 weavers who work on 25 handlooms. It reported revenues of Rs1.5 crore last year from silk sarees, shawls, stoles and dress material.

Kushwaha, however, worries about the future of handloom weaving. The new generation is less inclined to take up weaving as a profession as it involves much hard work, he says. Most of his weavers are in the 45 to 55 age group and earn Rs250 to Rs300 daily. "One can earn the same money working at a powerloom with less stress," he says. "I wonder how to make this an attractive profession for the youth."