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THE commerce ministry has provided a new year gift to millions of weavers and silkworm rearers in the country by extending the anti-dumping duty (ADD) on Chinese silk yarn for another spell of four years effective January 1, 2009.

As a part of the decision, the reference price has also been changed and is placed at $37.32 per metre against the prevailing level of $27.92 per metre, sources told ET.

Sources said there was a need to change the reference rate given the currency movement. The ADD is aimed at preventing import of inferior varieties of Chinese raw silk and levied as differential duty payable if the price of imported Chinese raw silk falls below the rate of $ 37.32.

“The concern is that many a times inferior variety of silk notably below the 2A grade comes into the country. The ADD helps to address the issue while ensuring that the genuine requirements of weavers and reelers are met with,” sources added. India which is the world’s second largest producer of silk, has annual output of only about 17,000 tonne with the balance of nearly 7,000 tonne being imported notably from China.

Sources also said that while the ADD on raw silk has been extended, the ADD on silk fabric will continue till 2011. The reference rate for silk fabric is in the range of $1.86 per metre to $4.7 per metre. The ADD, it maybe recalled, had been initially levied in 2003 for a period of five years. The Union government only managed to extend duty for a period of one year in January early this year.

While welcoming the imposition of the ADD, industry observers said various agencies including the Central Silk Board and the department of sericulture have to focus on increasing the country’s output of silk.

Source:Industry Website