Indian Silk Industry Seeks Curbs on Chinese Dumping Amid Geopolitical Clamor

March 16, 2021 Updated: March 17, 2021

News Analysis

VARANASI, India—After bilateral relations between India and China reached an abysmal low following a bloody border clash, India’s silk industry reiterated its call for a ban by the Indian government on silk imports and illegal dumping from China, accusing its neighbor of seeking to destroy the indigenous Indian industry.

China is the largest silk producer in the world, while India stands at No. 2. The industry, which is one of India’s largest generators of foreign exchange, was a source of employment for 9.1 million Indians in fiscal year 2019, according to the Indian Brand and Equity Foundation.

At a time when the pandemic further intensified the anti-China sentiment in the country, the Silk Association of India, a body consisting of stakeholders from the industry, wrote to the Federal Textile Minister seeking a ban on silk originating from China, while also raising concerns about the dumping of Chinese raw silk from neighboring countries that enjoy duty-free provisions from India.

“Production of silk in China is quantitatively far more than the quantity of silk produced in India. But India is the next highest silk-producing country in the world,” C. Narayanaswamy, the honorary president of the Silk Association of India and a former member of Parliament, told The Epoch Times in a phone call. “If the silk industry is ruined in the country, they will have a monopoly of silk production in the world globally, and they can price it as they like.”

He said that Chinese silk has been imported to the Indian market at below the cost of production of domestically produced silk, as Beijing has done with many other industries in the world.

While this happened legally, the Chinese silk was also illegally dumped into the country through countries such as Nepal and Bangladesh, which enjoy duty-free provisions from India, he said.

“In fact, Japan was previously the leading silk-producing country. China overtook Japan because of these illegal, unethical business practices,” Narayanaswamy said.

Epoch Times Photo
A handloom weaver weaves a silk saree in the Revari Talab locality of Varanasi, India, on Feb. 18, 2021. The weaver is using both Chinese and Indian silk in this product. (Venus Upadhayaya/Epoch Times)

In a Silk-Weavers’ Neighborhood

As the world was plunged into pandemic-caused economic challenges, Indian Prime Minister Narendra Modi launched the Aatma Nirbhar Bharat (self-reliant India) campaign and announced an economic package to help the nation out of the coronavirus crisis.

The Silk Association of India in its letter to the Federal Minister in July last year asked for a total ban, citing the new narrative of a self-reliant India assisting the domestic industry and seeking to block the exploits of the Chinese.

Less than a year later, while the Indian government has increased the import duty on Chinese silk from 10 percent to 15 percent, a complete ban has yet to happen.

“The government of India has not gone into completely banning the import, but it has responded to the demands of the local industry stakeholders by imposing 15 percent customs duty in this year’s budget,” said Narayanaswamy.

As the weaving industry, particularly the traditional handloom industry, seeks a return to normalcy after the coronavirus lockdown was lifted, the weavers continue to use the Chinese silk stocked in the Indian market. They also identify the alternate routes through which Chinese silk is entering the Indian market.

Ansar Alam, 45, a silk merchant in the Madan Pura locality of Varanasi, India, sat in his small shop on a mid-February afternoon, trading in Chinese silk and varieties of Indian silk that go into weaving Banarasi silk sarees, a six-meter (almost 20 feet) Indian garment for women.

Epoch Times Photo
Ansar Alam, a silk merchant, sits in his shop in the Madan Pura locality of Varanasi, India, on Feb. 18, 2021. (Venus Upadhayaya/Epoch Times)

“The pandemic and the lockdown have impacted us so much that we still haven’t been able to recover,” Alam, who has been selling silk for 25 years to the local saree weavers, told The Epoch Times.

There are more than 400 silk sellers in Varanasi alone who supply the saree weavers; the most sold raw silk in the market is Chinese silk, followed by Indian silk coming from Bangalore, according to Alam, who survived on private loans during the pandemic.

“This year will also go like that. We’re not earning profits,” he said.

“For every 200 grams of Chinese silk used in a Banarasi silk saree, 400 grams of Indian silk is used,” said Alam. He noted that Chinese silk is used for the base while Indian silk is used for ornamentation in the weave.

“Indian silk is used to bring out the design. If the base silk quality is good, the saree quality is good,” he said.

Amir Hamza, a master weaver who works with nearly 15 handloom weaver families, said Chinese silk is good for a Banarasi saree weave because the thread length for that particular weave is six and a half meters, which the Chinese silk thread provides.

Because of such reliance on Chinese silk for a traditional weave, Alam said that the Chinese have found ways to enter the Indian market.

“Chinese silk is available because it was stocked. But other than that, it hasn’t stopped coming, because it’s instead coming through Vietnam,” he said.

Narayanaswamy says the 15 percent customs duty is levied only on the import of Chinese silk and not on silk arriving from other countries.

“But other SAARC [South Asian Association for Regional Cooperation] countries, we have a commercial relationship and we have agreed to allow them to export silk and other commodities without imposing customs duty. Silk is still coming to India, and they are able to affect our sericulture production also,” he said.

Hamza said he believes Chinese silk is also being imported to India through Malaysia and Taiwan. The Epoch Times couldn’t immediately verify Hamza’s claims.

Epoch Times Photo
Meeraz Akhtar, 40, a master saree weaver, sits in his handloom unit showcasing a Banarasi silk saree. The pink, or base, silk in this saree is from China, while the golden silk is Indian. (Venus Upadhayaya/Epoch Times)

“That’s because there’s a policy in the country regarding the import of silk and certain other products from countries which enjoy the MFN [Most Favored Nation status]; they don’t pay import duty. So the Chinese, what they do, they divert their sale through these countries, even though these countries don’t produce [much] silk,” said Narayanaswamy.

The strained relations between India and China motivated the latest attempt to press for a ban on the import of Chinese silk, he said.

“We can increase the production of indigenous silk to meet the demand of silk locally in the country. Lately, we have greatly succeeded in increasing our silk production and also quality, improving the processing technology in India. Compared to previous years, we are in a better position, and we’ll be shortly self-sufficient in silk production,” he said.

“Above all, the best solution would be to impose a customs duty on the silk imported from other countries, given how the silk originally comes from China. That’s our main demand now.”

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