The present trends represent a limitation to price increases for silk produced in
India by ..... However, in order to facilitate testing and transaction of raw silk.
CHAPTER 1 INTRODUCTION Silk the queen of textile still remains un-conquered among different fabrics, both natural and man-made. India has the unique distinction of being the only country producing all the five kinds of silk - Mulberry, Eri, Muga, Tropical Tasar and Temperate (Oak) Tasar. Though India is the second largest silk producer in the World after China, it accounts for just 5% of the global silk market, since the bulk of Indian silk thread and silk cloth are consumed domestically. Germany is the largest consumer of Indian silk. Over six million farmers are involved in sericulture in India. The sericulture industry is land-based as silk worm rearing involves over 700,000 farm families and is concentrated in the three Southern states of Karnataka, Tamil Nadu and Andhra Pradesh. (The states of Assam and West Bengal are also involved in the industry to a certain extent). The demand for raw silk in India can be grouped under four main heads: domestic demand for traditional non-graded multivoltine; domestic demand for non-traditional silk fabrics made up of non-graded bivoltine silk; international demand for silk fabrics and readymades which requires graded bivoltine; and niche markets for special handloom fabrics, requiring local reeled silk and processed silk waste. In recent years, due to a shortage in domestic supply, India has emerged as a net importer of raw silk and yarn. India is the only country in the world to produce all varieties of silk, viz mulberry, tasar, eri and muga, although only mulberry silk is important from the point of view of trade. Based upon the technology used, silk is called bivoltine or multivoltine, which essentially refers to the frequency with which the silkworm hibernates. Bivoltine silk is a better quality silk, based upon the strength and length of the fiber. The type of silk produced in India is multivoltine, as climatic conditions in India are not conductive to produce the higher-quality bivoltine silk. 1
The present trends represent a limitation to price increases for silk produced in India by import from other silk producing countries like China, Brazil, Korea etc., as well as by substitution with other fibres including by artificial silk. It also appears unlikely that the present demands can be met merely by expanding mulberry area in order to increase cocoon and raw silk production. Future additional output in raw silk will therefore mostly have to come from substantial productivity increases, mainly area and labour productivity. Concurrently there is a growing demand for silk fabric among the growing Indian middle class and young urban consumers. The expanding power loom weaving industry typically produces these modern silk fabrics. The quality requirements imposed by this trend can only be met by bivoltine raw silk, although it is possible to produce high quality multi-bivoltine silk for conventional powerloom. The bulk of today’s world export demand is almost exclusively based on high graded quality bivoltine raw silk. If Indian sericulture is unable to generate a substantial production of bivoltine raw silk, these important market segments will continue to be lost to outside competitors. Hence, three main market segments offer great opportunity to India’s silk industry: (i)
the broadening domestic traditional demand multi bivoltine based,
(ii)
the domestic demand for non-traditional silk fabrics, based atleast partly on non-graded bivoltine raw silk,
(iii)
the vast and expanding international market for raw silk, silk fabrics and ready-mades, based on graded bivoltine silk, an export potential as yet relatively little exploited by India.
The present global scenario clearly indicates the enormous opportunities for the Indian silk industry. However, the need of the hour is to boost the production of bivoltine silk to meet the demands of quality silk of both domestic and international markets with reduced cost of production. CSB institutions have developed tropical bivoltine technologies to support the state in launching the ambitious bivoltine development mission.
2
The initiative of “quality clubs” by sild producing states to advice farmers on newer and cost effective technologies, use of natural fertilisers, agronomic and rearing practices, is to reduce production cost. Since sericulture provides additional source of income to farmers, and taking a cue from other sectors like horticulture, sugarcane, cotton, and dairy industry, the sericulture industry should rope in corporates. Indonesia and Thailand have done. HSS Code : 5001 - 5007
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CHAPTER 2 IMPORTANCE OF SILK Silk weaving has been one of the traditional industries ever since historical times when silk dominated the fashion world and glitter of those times. Traditionally the origin of silk weaving is in India from where the technique of silk weaving spread to other Asian Countries like Japan, China etc. Export of silk products in any form of clothing amounts to exports of products that are indigenously produced in Cottage Industries. Apart from earning foreign exchange these products lend lustre to enhancing the image of the country. Export of silk products though being over shadowed by other competitive products like linen would still retain its level of importance where the quality of product over the centuries over shadows any competitive material attempting it. Export of silk products would still continue its applications in apparel industries, which generates maximum demand for these products. In 2002, India produced 15000 tons raw silk and imported 7000 tons, with China accounting for a little over 5000 tons. They reduced prices five times and gave a run to our farmers. The final intervention of levy of anti-dumping duty on Chinese imports brought about a level playing field. India exports silk products worth Rs.21 bln annually; expectations in 02-03 are Rs.24 bln.
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CHAPTER 3 SILK IN WORLD MARKETS Silk has a minuscule percentage of the global textile fibre market - less than 0.2%. This figure, however, is misleading, since the actual trading value of silk and silk products is much more impressive. This is a multibillion-dollar trade, with a unit price for raw silk roughly twenty times that of raw cotton. The precise global value is difficult to assess, since reliable data on finished silk products is lacking in most importing countries. Unlike some other textiles, silk-wearing traditions and demand go back a long way. A good example is India, where the local demand greatly exceeds supply and hampers export growth. India has thus become the largest importer of raw silk, despite the fact that it is now the second largest producer. Some other silk producers are also experiencing fast-growing local demand, such as China, where consumers are increasingly able to afford the low price range silk products. This pattern is also expected to repeat itself in Vietnam. Silk has been linked with sought-after creations by the biggest names in Fashion Houses. Yet, many admirers of spectacular garments shown on the catwalks of London, Milan, New York and Paris are unaware of the modern origins of this illustrious textile product. The fact is that the raw material comes from rural areas in developing countries and transition economies is in stark contrast to the affluent environment where elegant garments of famous fashion houses are presented to a select few. International Trade Council is involved in its work to help developing countries to improve their exports. In fact, today’s largest producers and suppliers of raw silk and silk yarn are in Asia, with the notable exception of Brazil. A major reason why International Trade Council stays involved is because sericulture and silk production are labour intensive at the village level, employing both men and women at all stages of production. In China, this sector occupies some 20 million farmers, as well as 500,000 people in the silk processing industry. In India, sericulture is a cottage industry in 59,000 villages. As one of the most labour intensive sectors of the Indian economy, it provides full and part-time employment to some six million people. In fact, this sector has 5
been identified as a sector of the Indian economy with strong potential to create jobs. Silk is also environmentally friendly. Silk is produced with few chemical fertilisers and practically no insecticides. Primarily made of proteins, it is close in composition to human skin, making it extremely comfortable to wear. New synthetic fibres are ever more sophisticated. They look and feel like silk, but are easier to care for. Viscose and polyester have taken some of silk’s market share. While the boom for sandwashed silk is past, its introduction damaged silk’s luxury image. No international promotion campaigns are addressing this issue, reflecting the lack of cohesiveness among suppliers, traders and buyers in the industry. The fast-developing economies in Asia had been showing an increasing interest in silk products, as the standard of living rose steadily. Recent economic turmoil in Southeast Asia, however, has been reflected in a decline in sales. Silk production centres are closing. This trend is well underway in Japan and Republic of Korea, due to the industrialisation of the two countries. Millions of families in rural areas in China, Thailand, Brazil and other countries may now face the socio-economic choice of whether or not to continue producing silk. If farmers turn from this activity for a more lucrative type of farming, the industry cannot easily recover. Working with silkworms requires strict discipline, learned by tradition through generations A generic silk promotion campaign could be a solution to the challenges in the industry today. Currently, there are no concerted efforts from silk producers, converters and traders to improve the image of silk in international markets. An example of what could be done is to be seen in the European Union’s campaign to promote linen as fashion material. In the past, linen was mostly used for home products such as table cloths and napkins. Due to this intensified campaign, linen has taken its place among other fibres used in fashion. A campaign should aim to reposition the image of silk, capitalise on new technologies and changing market demands and to encourage silk production. 6
As campaigns require both co-ordination and investment, and may take several years before they have an effect, an effective approach may be to work through industry associations in order to craft national campaigns in the largest consumer markets. Another alternative may be for the silk industry to work with major retailers in Europe and the United States. Ideally, an industrywide action plan will have the most impact. Based on International Trade Council analysis of recent trends, generic silk promotion campaigns should contain the following elements. The image of silk -Silk should be marketed as an environmentally friendly, luxury product. Demand for silk blends and knitted silk -Silk blends are one way to answer the challenge from synthetic fibres. Lately, silk has been blended with other fibres, such as cotton, linen, wool and even polyester. Developing country silk producers have not yet progressed very much in this field. They need to develop their research and technology to offer competitive new products.
Knitted silk products are an answer to the market demand for comfort, expressed during the sandwashed silk boom. Consumers, especially in the United States, were attracted by these garments that were soft, comfortable, casual and easy to maintain. Knitted silk has the advantage of being a casual, yet quality silk product, and can fetch attractive market prices. China has made progress in this product category. After introducing silk thermal underwear for outdoor living, other types of knitted silk garments are now being exported, such as T-shirts, camisoles, polo shirts and sweaters. This trend should be followed, because it may have a reasonable growth potential for a number of silk producing developing countries. New product categories For instance, there is scope to expand the role of silk fabrics for interior decoration. In the medium term, the role of the Asian markets will be vital. Asians will continue to be consumers, and it is likely that growth will resume in this area. It is important to safeguard their role as producers in light of the challenges 7
facing them today. Recognising this, the World Bank is rehabilitating the sericulture and silk production industries in Bangladesh. Since the country has long used silk fabrics for saris like in India, greater silk production in Bangladesh is aimed at reducing raw silk imports, as well as creating a new indigenous raw material for garment exports. International Trade Council has worked with firms, national governments and industry associations to promote silk and silk products in silk producing developing countries, particularly in Asia. The Council has closely monitored world production and trade in silk goods, working with key industry players such as the International Silk Association, the International Sericulture Commission both in Lyons, France, and relevant organisations in developing countries, including the China National Silk Import and Export Corporation, the Central silk Board of India, the Indian Silk Export Council, the Thai Silk Association and others. International Trade Council projects gave an opportunity to local silk industries, particularly in China, India, Malaysia and Thailand, to develop products and markets. The Council provided technical assistance for silk fabric dyeing and printing, design, pattern making and grading, cutting and other silk production techniques. Participating companies were introduced to new markets and customers through market contact missions in foreign markets. The message was to move toward silk processing and finished products, in order to improve value-addition and stay competitive.
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CHAPTER 4 TEXTILE POLICY SILK & OTHER APPARELS Focus will be on achieving international standard in all varieties of silk. Steps will include: •
Improving Research & Development and the effective transfer of technology at all stages;
•
Considerably improving the production of non-mulberry varieties of silk;
• • •
Augmenting efforts for the spread of bivoltine sericulture;
•
Periodically reviewing the import policy for raw silk taking into account the balanced interests of the sericulturists as well as the export manufacturers.
•
To augment availability of quality product and perceiving the role of the Textile Industry in providing one of the most basic needs of people and the importance of its sustained growth for improving quality of life;
• •
Encouraging clustering of activities of reeling and weaving and strengthen linkages between the producers and industry;
Recognising its unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value addition at each stage of processing; and its major contribution to the country’s economy;
•
Realising its vast potential for creation of employment opportunities in the agricultural, industrial, organised and decentralised sectors & rural and urban areas, particularly for women and the disadvantaged;
•
To acknowledge the tremendous impetus provided by the Textile Policy 9
of 1985 to the economy, resulting over these years in compounded annual growth rates of 7.13% in cloth production, 3.6 % in the per capita availability of fabrics; and 13.32% in the export of textiles; raising the share of textiles to 13% of value added domestic manufacturing of the country; and to one third of the export earnings of the country. Taking note of the new challenges and opportunities presented by the changing global environment, particularly the initiation of the process of gradual phasing out of quantitative restrictions on imports and the lowering of tariff levels for an integration of the world textile and clothing markets by end 2004. The need for a focussed approach to maximising opportunities and strengths inherent in the situation; Having studied the issues and problems facing the sector, the views of a wide range of stakeholders, and the recommendations of the Expert Committee set up for this purpose have decided to redefine the goals and objectives, focus on thrust areas and sharpen strategy in tune with the times. VISION Endowed as the Indian Textile Industry is with multifaceted advantages, it shall be the policy of the Government to develop a strong and vibrant industry that can produce cloth of good quality at acceptable prices to meet the growing needs of the people; Increasingly contribute to the provision of sustainable employment and the economic growth of the nation; and compete with confidence for an increasing share of the global market. OBJECTIVES The objectives of the policy are to Facilitate the Textile Industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing. Equip the Industry to withstand pressures of import penetration and maintain a dominant presence in the domestic market. Liberalise controls and regulations so that the different segments of the textile 10
industry are enabled to perform in a greater competitive environment. Enable the industry to build world class state-of-the-art manufacturing capabilities in conformity with environmental standards, and for this purpose to encourage both Foreign Direct Investment as well as research and development in the sector. Develop a strong multi-fibre base with thrust of product upgradation and diversification. Sustain and strengthen the traditional knowledge, skills and capabilities of our weavers and craftspeople. Enrich human resource skills and capabilities, with special emphasis on those working in the decentralised sectors of the Industry and for this purpose to revitalise the institutional structure. Expand productive employment by enabling the growth of the industry, with particular effort directed to enhancing the benefits to the north east region. Make Information Technology (IT), an integral part of the entire value chain of textile production and thereby facilitate the industry to achieve international standards in terms of quality, design and marketing and, Involve and ensure the active co-operation and partnership of the State Governments, Financial Institutions, Entrepreneurs, Farmers and Non-Governmental Organisations in the fulfilment of these objectives. THRUST AREAS In furtherance of the objectives, the strategic thrust will be on: Technological upgradation Enhancement of Productivity Quality Consciousness Strengthening of the raw material base Product Diversification Increase in exports and innovative marketing strategies Financing arrangements Maximising employment opportunities Integrated Human Resource Development 11
IMPORTANT TARGETS AND OUTPUTS Achieve the target of textile and apparel exports from the present level of US $ 11 billion to US $ 50 billion by 2010 of which the share of garments will be US $ 25 billion. Implement vigorously, in a time bound manner, the Technology Upgradation Fund Scheme (TUFS) covering all manufacturing segments of the industry; Achieve increase in cotton productivity by at least 50% and upgrade its quality to international standards, through effective implementation of the Technology Mission on Cotton; Launch the Technology Mission on Jute to increase productivity and diversify the use of this environment-friendly fibre; Assist the private sector to set up specialised financial arrangements to fund the diverse needs of the textile industry; Set up a Venture Capital Fund for tapping knowledge based entrepreneurs of the industry; Encourage the private sector to set up world class, environment-friendly, integrated textile complexes and textile processing units in different parts of the country; De-reserve the Garment industry from the Small Scale Industry sector; Strengthen and encourage the handloom industry to produce value added items and assist the industry to forge joint ventures to secure global markets; Re-design and revamp, during the 10th Five Year Plan, the Schemes and Programmes initiated in the handloom, sericulture, handicrafts and jute sector to ensure better returns for those belonging to the disadvantaged categories, and the North East and other backward regions of the country; 12
Facilitate the growth and strengthen HRD Institutions including NIFT (National Institute of Fashion Technology) on innovative lines; Review and revitalise the working of the TRAs (Textile Research Associations) to focus research on industry needs; and Transform, rightsize and professionalise all field organisations under the Ministry of Textiles to enable them to play the role of facilitators of change and growth. OTHER THRUST AREAS - INFORMATION TECHNOLOGY (IT) Recognising the vital role of IT in a progressively IT-driven global economic environment, as also its scope in bringing about speed, efficiency and transparency in delivery systems, Government will play a proactive role in promoting and facilitating adoption of IT in the textile industry and trade. Using IT as the platform, a strong commercial intelligence network will be built up and suitable infrastructure for harnessing the potential of e-commerce will be put in place. HUMAN RESOURCE DEVELOPMENT HRD assumes new significance with inescapable competition facing Indian textile products both in the international and domestic markets. Government will support programmes of organisations and institutions engaged in HRD that addresses the professional manpower needs of the industry, as well as at the cutting edge level of workers and shop-floor supervisors. Institutions will be encouraged to network and synergistically co-operate amongst themselves. IT will become an integral part of HRD effort. In recognition of the pioneering role of NIFT, the Institution will be assisted to grow and progress on innovative lines. The Nodal Centre for Upgradation of Textile Education (NCUTE) will be helped to grow into an autonomous National level TexEd Resource Centre. Information and expertise available in technical institutes like IITs, TITs and NID will be tapped for expansion of programmes.
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FISCAL AND FINANCING ARRANGEMENTS A growth-oriented fiscal road map will be drawn up, which has the advantage of predictability. The parameters within which the multi-level duty structure and rates of levies will be reviewed and rationalised will include the thrust on exports, the fiscal regime of major competing countries, WTO consistency, and the need to keep prices at levels affordable to the largely poor consumers, who will continue to form the bulk of the market. Funding requirements of different segments of the textile industry will be periodically reviewed and short-term and long-term requirements spelled out, particularly of the handloom, powerloom, handicrafts and sericulture sectors. Innovative measures for tapping public and private sector funding will be worked out. The endeavour will be to, Encourage the private sector to take the initiative in participating in financing of specific needs of the textile industry; Set up a Venture Capital Fund in consultation with and involvement of financial institutions for the promotion of talented Indian Designers, Technologists, innovative market leaders and e-commerce ventures; DELIVERY MECHANISMS FOR IMPLEMENTATION OF THE POLICY Organisations working under the Ministry of Textiles will be re-oriented, rightsized and restructured to act as facilitators instead of regulatory bodies, with the mandate and role of each being reviewed and redefined over the next two years. Simultaneously, regulations and controls will be reviewed and progressively reduced. Some of the specific changes will be: The role of the Offices of the Textile Commissioner and Jute Commissioner will be moulded to serve the developmental needs of the industry; Export Promotion Councils will be restructured so as to become capable of devising dynamic export strategies; promoting financing; disseminating information on various aspects of the WTO agreements, extending legal advice to trade and industry in dispute settlements, etc. 14
All the nine Textile Research Associations under the Ministry of Textiles will be revamped to give a market and industry driven focus to their Research and Development support. The role of the Central Silk Board will be restructured in keeping with the objective of participative implementation in partnership with the State Governments and the private sector In furtherance of the objectives, the strategic thrust will be on: Technological upgradation Enhancement of Productivity Quality Consciousness Strengthening of the raw material base Product Diversification Increase in exports and innovative marketing strategies Financing arrangements Maximising employment opportunities Integrated Human Resource Development The process of production of silk through cultivation of mulberry and other suitable plants and rearing of silkworms is a labour intensive industry with four distinct phases of activity namely, raising of plants, rearing of silkworms, production of raw silk and weaving and marketing. Bulk of the production of silk comes from five traditional silk producing states viz., Karnataka, Andhra Pradesh, Tamil Nadu, West Bengal, and Jammu & Kashmir. About 50,000 villages out of 5,76,000 villages in the country are engaged in sericulture, providing employment to about 50 lakh persons, most of them belonging to weaker sections. The Central Silk Board presently functions under the administrative control of the Ministry of Textiles, Government of India. It was established in April 1949 under Central Silk Board Act, 1948 Act for promoting the development of the silk industry. With this objective, the Board had been entrusted with the following main functions: undertaking and assisting scientific, technological and economic ♦ research; 15
♦
devising means for improved methods of mulberry cultivation, rearing, developing and distributing healthy silkworm seeds, reeling or spinning of of silkworm cocoons and silk waste, improving the quality and production of raw silk;
♦
improving the marketing of raw silk; and
♦
advising the Central Government on all matters relating to the development of the raw silk industry, including the import and export of raw silk.
Under Section 2 of the Act, it has been declared that it is expedient in the public interest that the Union should take under its control the silk industry. The Board, however, has no actual control over the industry. The Board stated in December 1992 that though the Act is very clear that it has been established for the development of Silk Industry, it has been vested only with limited functions and duties mainly for development of silk industry through research and development. The Board has also stated that there are various other activities mainly trade and commerce in silk goods which are directly controlled by the Central Government through the Industries Development and Regulation Act, 1951. As the subject of sericulture and products of silk Industry are included both in State list and concurrent list under schedule VII of the constitution of India, the State Governments have passed legislations regulating and controlling the production and distribution of silk products including seeds and cocoons. Presently the Board is engaged in research in pre-cocoon and post-cocoon technology, imparting training to farmers and reelers, production of improved and disease free laying, to determine the new areas for production of silk, supply mulberry cuttings/ saplings to new areas, etc. to detect and control the diseases affecting the plants and silkworms, co-ordinating with the State Governments/ Agencies in implementing 16
various projects, Pre-shipment inspection and certification. The Board has no outlets under its control for supply of raw silk and silk products. However, in order to facilitate testing and transaction of raw silk under one roof for the convenience of sellers and buyers, the State Governments are running silk exchanges in various places. According to the Board, it had made provision under the National Sericulture Project to construct five silk exchanges and silk conditioning and testing houses in the traditional silk-producing states after completion of which the silk exchanges would be handed over to the State Governments for operation. The activities of the Board regarding its efforts for stabilization of prices of raw silk and supply of cocoons have been examined in later paragraphs. Under Section 3(a) of the act, the Board is required to advise the Central Government on all matters relating to development of the raw silk industry including import and export of raw silk. During recent years the Board, apprehending great harm to the indigenous sericulture industry by the continued import of raw silk into the country, resolved to recommend to the Government of India total ban on import of raw silk. Further, it was also resolved that if any raw silk is to be imported for actual use in export products. Government of India might permit such imports only through the Board. The resolution was communicated to the Central Government. However, Central Government had allowed direct import of raw silk. Indian Silk Export Promotion Council is the nodal agency for promotion of silk exports from India. And has more than 1200 silk exporters as members. They provide information and intermediation services for: Right contacts in silk business within the country and abroad Organising buyer-seller meets for silk products Product ranges available in India Participation in international textile fairs 17
Latest trends for fashions, colours and designs Product improvement in silk Foreign collaborations for silk In short they are the right source of information about all that India offers to the world in silk. NSIC:National Small Industries Corporation Ltd. operate on export of indian products ♦ export of technology solutions from India ♦ export of relief supplies from India to UN and other international ♦ agencies They give raw material assistance by financing purchase of imported raw materials; pre and post shipment finance for export development to meet the emergent requirements of small scale exporting units. Dumping duty on Chinese silk extended In an order to provide relief to weavers, especially from Varanasi, the centre has decided to continue anti-dumping duty on silk imports from China for five more years. The Central Board of Excise and Customs has issued a notification in this regard. Anti-dumping duty was first imposed in 2006 and was extended on April 21, 2011. It was further recommended for continuation on December 5. The duty is imposed on imports of silk fabrics 20-100 grams a meter. It will be affected on various kinds of silk fabrics such as crepe, georgette, chiffon and Habutai. Silk fabrics produced in other countries but exported by China or Chinese silk exported by other countries will also be covered under the notification. The anti-dumping duty imposed will be payable in Indian currency. The rate of exchange applicable for the purposes of calculation of anti-dumping duty will be the rate which is specified in the notification of the finance ministry issued from time to time.
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CHAPTER 5 Conversion of Raw silk to silk cloth Raw silk needs cleaning and twisting into heavier strands before it can be woven into cloth. The twisting is known as throwing and people who do it are called thrusters. The process is mechanized. Workers in throwing nicles soak the skins of raw silk to soften the remaining sericin. They then straighten out the skins, dry them and put them on reels. A machine quickly winds off the strands to big spools called Bobbins. Throwing machines contain hundreds of spindles and bobbins. On these machines thrusters combine two or more single strands known as singles into one yarn with varying amounts of twist. The throwing process that combines strands is called doubling. Two or more singles twisted lightly together make trams. This yarn is used to make weft of cloth. Two or more twisted singles twisted together firmly in the opposite direction from original twist make organzine which is used as warp. Thrown silk still contains sericin. Workers remove this gummy substance either before or after the yarn is dyed. Removal of sericin does not affect the length or strength of silky yarn. It does reduce their weight. The methods used in dying yarn weaving cloth and printing fabrics are in general the same for silk as for other kinds of cloth. Weighted Silk: This is defined as silk which has been passed through a solution of metallic salts. The salts combine with the silk and add to the weight. Weighted silk has a better lustre than un-weighted silk and drapes better but is less durable. Pure Silk means a fabric made only of silk. They cannot be applied to clothe containing any substance other than silk except dyeing and finishing materials. Finishing Materials shall not constitute more than 15% by weight of black silk or more than 10% by weight of white or coloured silk. Weighted silk bears label showing the amount of weighting and finishing Materials over and above 3 percentage. 19
CHAPTER 6 MARKETING Marketing of silk products is achieved through appointment of overseas agent who would be in charge of distribution of the product overseas or routing the products through a main distributor who would in turn be in charge of dealing with area distributors and dealers. During the past couple of years, sequel to liberalised exim policy, dumping of raw silk by China had played havoc with indigenous producers. After persistent efferts of Central Silk Board, Govt. has now imposed anti dumping duties on raw silk and silk yarn. This has resulted in level playing field. However, the Indian importer will still look for cheaper sources of imported supplies which can occur if the exporting country like China reduce the basic price resulting in ineffectivenyss of anti dumping mechanism. Revision of import duties to meet the needs of silk industry is a contimuous process. The effect of globalisation and liberalisation of trade needs constant watch on developments by all players of the industry. The process of appointment of agent shall be subject to an agreement made between the two parties outlining the various terms & conditions of agency / distributorship. The purchase order is procured first by sending samples to the agent who would in turn show the same to his distributors / clients and then get the same approved. After approval of the same at trial order is placed and then a bulk order is secured in terms of thousands of pieces. Execution of the order as per the time commitment as stated in the LC is very important and all the clauses incorporated in the LC like inspection designated bodies / agencies which must be carried out before dispatch with precision. Early planing in the execution of the order will definitely be of great assistance in its effective implementation. 20
Quality certifications by accredited agencies is almost mandatory for all classes of textile products or self certification is carried out by the manufacturer stating and expressing confidence in the quality of products. Buyer Seller meets and other trade fairs organised by the export promotion council would be very beneficial in meeting buyers. Packaging must be done to the specifications of the customer / International Specifications prescribed for the product. This is to ensure that there is no damage to the product during transition. Quota regulations by the respective countries in import of textile products must be adhered to. The norms in allotment of quotas are a vivid indication of the number of pieces that can be allotted. The importing countries have specifically introduced these quotas to prevent dumping. Endeavour should be progressive in attempting to secure orders in non-quota countries also which are latent markets with sizeable development potential. Carpets Exports of Silk carpets grew at 33.3% y-o-y and stood at US$ 26.5 mln in FY04. The main destinations for exports were the US, Germany, UK and France, accounting for a market share of 34.4%, 24.5%, 9.3% and 5.2% respectively in FY04. Exports to the US have grown at a CAGR of 10.8% from FY98-FY04 making it the largest destination for carpets exports, thereby replacing Germany, which has seen its exports decline at about 8% during the same period.
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CHAPTER 7 EXPORT STATISTICS Total Exports - Silk Items TOTAL EXPORT EARNINGS OF SILK ITEMS [Rs . in Crore, $ in Million] Itemwise Export JULY APRIL to JULY 2012 2011 2012-13 2011-12 Rs. US $ Rs. US $ Rs. US $ Rs. US $ Natural Silk Yarn 1.48 0.27 1.71 0.38 6.00 1.10 6.38 1.43 Fabrics, Madeups
72.72 13.11
Readymade Garments 143.30
25.82
83.72 18.85
293.78 53.95 312.64 70.04
143.21 32.24
467.73 85.90 439.96 98.56
Silk carpet
0.57
0.10
1.46
0.33
7.41
1.36
5.43
1.22
Silk waste
4.23
0.76
3.84
0.86
19.03
3.49
9.94
2.23
TOTAL 222.30 40.06 233.94 52.66 793.95 145.80 774.35 173.48 _______________________________________________________________________________
COUNTRYWISE SILK EXPORT EARNINGS [ Rs. in Crore, $ in Million]COUNTRIES (Top 10) APRIL TO JULY ______________________________________________________ 2012-13 2011-12 Rs. US $ Rs. US $ ______________________________________________________ U.S.A. 128.96 23.68 143.01 32.04 U.A.E. 93.71 17.21 87.98 19.71 U.K. 76.47 14.04 77.38 17.33 FRANCE 36.57 6.72 40.74 9.13 ITALY 36.04 6.62 40.88 9.16 GERMAN P REP 34.74 6.38 51.09 11.44 SAUDI ARABIA 31.71 5.82 43.84 9.82 AFGHANISTAN 27.08 4.97 14.14 3.17 TANZANIA REP 26.88 4.94 8.83 1.98 SPAIN 26.70 4.90 26.02 5.83 OTHERS 275.09 50.52 240.44 53.86 TOTAL 793.95 145.80 774.35 173.47 ________________________________________________________ Source: Foreign Trade Statistics of India (Principal Commodities & Countries), DGCI&S, Kolkata 22
Yarns, Fabrics and Made-ups Exports in Silk yarn, fabrics and made-ups category were valued at US$ 371mln in FY04, having recorded a CAGR of 13% since FY98. Fabrics constituted almost 85% of these exports in FY03 and were valued at US$ 264mln. India’s top five destinations for exports in this category were the US, UAE, UK, Hong Kong and Germany, accounting for almost 60% of India’s exports of Silk yarn, fabrics and made-ups in FY04. Exports to UAE and Hong Kong, in particular, have witnessed exceptional growth, with UAE emerging as the second most important destination for Indian exports of Silk fabrics and made-ups, dislodging traditional partners like Germany and the UK. Readymade Garments Exports were worth US$ 163.8 mln in FY04, having grown at a CAGR of 9.6% since FY98. The main destinations for export of Readymade garments from India are the US, UAE, UK, Italy and France. The US accounts for the largest share of India’s exports in this category with 26.4%.
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CHAPTER 8 EXPORT PROMOTION COUNCIL EPC Offices The Indian Silk Export Promotion Council 024
62, Mittal Chambers 6th Floor Nariman Point
16, National Park Lajpat Nagar IV New Delhi - 110
Mumbai - 400 021 Tel : (022) 2027662, 2025866
Tel : (011)
Fax : (022) 2874606
Fax : (011)
E-mail :
[email protected] www.silkepc.org
Tlx : 031 70175
6216272 6430685
Central Silk Board (CSB) http://www.csb.gov.in/ CSB advises central government on matters relating to silk industry including import and export of raw silk. They also undertake voluntary inspection of silk goods meant for export.
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CHAPTER 9 QUALITY CONTROL Quality Control has always been of prime importance in any manufacturing Industry. In fact, it is the driving force behind success. Stringent quality control methods are followed to ensure high quality standards. Every fold of every garment is checked to make sure that it satisfies customers. The Physical tests carried out in the lab include Fibre Testing is carried out in the manufacture of items where silk is combined with fibre. Cotton fibre properties such as length, strength, fineness, maturity, neps, color and trash content. Man-made fibre properties such as length by BISFA method, fineness, strength, crimp, neps, microscopic analysis of faults, moisture content etc. Yarn Testing Count, strength, twist, unevenness and imperfections by Uster UT4, hairiness, single yarn strength, breaking elongation, co-efficient of friction, abrasion resistance, microscopic studies, dynamic tensile properties (by CTT), yarn appearance (both manually and by using automatic instrument (EIB)), classimat faults and moisture content. Fabric Testing Fabric particulars such as ends and picks per inch, thickness, weight per square meter, constituent yarn count and twist, yarn crimp, etc. Fabric properties including tensile properties (bursting strength, tearing strength, grab strength), air permeability crease recovery, drape, abrasion resistance, pilling, stiffness and bending length. Besides testing, analysis of fabric faults and probable causes of the faults are identified. The various instruments used in the quality control department in manufacture of silk and silk blended products are given below: 25
Gas Chromatography/Mass Spectrophotometer Atomic Absorption Spectrophotometer UV Visible Spectrophotometer High Performance Thin Layer Chromatography High Liquid Chromatography Differential Scanning Calorimeter Computer Colour Matching System Image Analyzer The chemical tests carried out not only pertain to textile fibres, yarns and fabrics but also to chemicals and effluents. The following are some of the major chemical tests done. Colour Fastness Water Testing Effluent Analysis Wax and Oils Singeing Materials Stringent quality standards are implemented at every stage of manufacture of the products. Many of the units have obtained ISO 9002 Classification to gain entry in foreign markets, which are very competitive. There is a strong emphasis on quality parameters in international trade of silk and silk products. Our multivoltine silk is inferior to bivoltine silk of China in terms of length of the reeling yarn and the strength of the yarn, leading to many more breakages. Thus, we have to rely on import of high quality silk to develop fabrics for export market. The stringent standards relating to quality, eco-friendliness and social responsibility set by US and EU may act as non tariff barriers.
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CHAPTER 10 SILK PRODUCTS QUILT The word quilt is derived from the Latin culcita, meaning a padded and tied mattress similar to Japanese futon. Quilting is a needlework technique involving two or more layers of fabric, usually sandwiched with padding of some sort, stitched together in a decorative pattern. It appears to have originated in Asia. The first known quilted object is a quilted linen carpet dating from that time found in a Siberian cave tomb. The central motifs are worked in the backstitch, while the background is diamond quilted in a coarse running stitch. The advantages in using quilt in cold climates are obvious a) Warmth without bulk b) Strength without stiffness c) Useable in everything from clothing to saddlecloths, and unusual enough to be traded for luxury goods. The quilted objects were indeed traded is obvious from the next oldest quilted artefact, a spiral quilted slipper found in a rubbish tip in Samarkand, a major stop on the Silk Road between China and Europe (Liddell). The backstitch technique is identical to that used in the funerary rug. The Renaissance brought increased trade with the eastern countries where quilting originated. This was also the time when European countries established colonies and trading posts in Asia. India had a strong native quilting tradition and quickly began producing export work in cotton and silk. Not surprisingly, quilting became very popular among aristocratic circles. Quilts were expensive, beautiful, and warm, all desirable qualities for the upwardly mobile in the Little Ice Age of the late Renaissance. 27
The true heyday of European quilting came in the late 17th and early 18th centuries, when quilted petticoats, waistcoats, bed linens, caps, and even doll clothing became wildly popular among the upper and middle classes. In its simplest form, quilting is simply decorative stitching designed to hold two or more layers of cloth and padding together. At least three methods were used to do this: the backstitch, the double running stitch, and the running stitch. Backstitch quilting is the oldest technique, used in the 1st century Siberian rug. It is surprisingly fast and accurate, and by far the easiest stitches for working with raw cotton wadding. It eventually gave way to the daintier running stitch, as better materials became common. Surviving period quilts are exclusively of either linen or silk, worked in matching thread, and stuffed with cotton. If wool was used, no example has survived. Early examples are natural linen or silk, with motifs outlined in a darker colour such as brown or gold; later examples were worked to match the quilt top. There are several uses for quilts and quilted objects. Good choice would be for quilted bedding, either pillows or bed quilts. Bed quilts are warm, practical, and as plain or as fancy as desired. Quilts are made of cotton broadcloth or calico. Quilting is addictive. The calicos used for modern quilting are among the most beautiful cottons being made today. TYPES OF SILK Raw silk is of two types 1.
Mulberry
2.
Non Mulberry
The destruction arises from the rearing of silk worms either upon 28
mulberry leaves or on other plants. Mulberry silk is produced in Karnataka, West Bengal, Jammu and Kashmir, Tamil Nadu, and Andhra Pradesh. Non Mulberry silk is produced in Assam, Bihar, Madhya Pradesh, Orissa, Manipur & West Bengal. Different types of non mulberry silk, Spun silk and moilyarn and referred to as Follan are produced in Bihar, Madhya Pradesh, West Bengal, and Orissa. Mulberry silk is produced in Karnataka, West Bengal, Jammu & Kashmir, Tamil Nadu, and Andhra Pradesh. Tsar Silk It is silk ruled from cocoons of silk worms belonging to saturnidae family which are feeding on leaves of oak, asan and arjan trees. Efforts are being made to introduce oaktasar rearing in the States of Manipur, Jammu & Kashmir, Himachal Pradesh, and Utter Pradesh. Eri Silk: It is spun from cocoons of silk worms belonging to saturnidae family, which are feeding on castor leaves. Eri yarn is produced in Assam, Bihar, Manipur, Meghalaya & West Bengal. Unlike other kinds of silk this cannot be reeled and hence it is spun. It has natural copper colour. Muga Silk: It is silk produced only in Assam from cocoons of silk worms belonging to saturnidae family which are feeding on san and soalu leaves. It has a rich golden colour. Spun Silk Yarn: Yarn composed of silk filaments of lengths ranging from 1 to 8" produced by bleaching, dressing and spinning. The silk waste is the byproduct of raw silk reeling industry. Noil Yarn: It is short staple residue obtained during dressing operations in silk spinning from silk waste. It is a by-product of spun silk industry. This can be spun into Noil Yarn of coarse counts. 29
TRADE FAIRS
Check the website of Apparel Export Promotion Council for the latest Trade Fairs.
SILK EXPORTS CONTENTS Chapter
TOPIC
Page No
1.
INTRODUCTION
1
2.
IMPORTANCE OF SILK
3
3.
SILK IN WORLD MARKETS
4
4.
TEXTILE POLICY
9
5.
CONVERSION OF RAW SILK TO SILK CLOTH
19
6.
MARKETING
20
7.
EXPORT STATISTICS
22
8.
EXPORT PROMOTION COUNCIL
23
9.
QUALITY CONTROL
24
10.
SILK PRODUCTS
26
11.
TRADE FAIRS
30
1112
Students and Exporters must please note that they should check with the authorities regarding the functioning of any of the various schemes enumerated in the following chapters. This is because additions, deletions and amendments to such promotional schemes are quite common.The general procedure for exports which are common for all export categories such as documentation, marketing, finance, etc have not been covered here, as they are given in greater detail in the main course materials.
