Dear Fellow Member Exporters,
Report of the Committee on the working of the Council and the Audited Accounts along with Statutory Report for the year 2006-07 have already been circulated and with your kind permission, I take these as read.
EXPORTS
Exports of silk during 2006-07, according to DGCIS, amounted to Rs. 3244 Crore, as against Rs. 3194 Crore achieved in 2005-06. In terms of dollars, exports were about US $ 755 million as against US $ 721 millions, about 4.7 % more than the last year’s exports. ($= Rs. 43 for 2006-07). As in the case of last year figures, which is revised upwards now, similarly, the current year figure would be revised upwards by about five percent.
TARGETS AND ACHIEVEMENTS
The target fixed for the year 2006-07 was US $ 700 million. Exports have achieved the target and registered an increase, of 7.9 percent over the target.
Exports of Natural silk yarn, fabrics and made-ups have shown a decline during the year 2006-07. The overall export was Rs.1934 Crore as against Rs.2229 Crore in the previous year, registering a decrease of 13%.
On the other hand export of silk readymade garments continued to increase to Rs. 1164 Crore as against Rs. 842 Crore, by registering a significant growth over previous year by 38%, in rupee terms and by 43% in $ terms. The target fixed for the current year is US $ 890 million.
EXIM POLICY & PRICE
The upward revision in drawback rates notified in July is highly inadequate to compensate exporters against appreciation of our currency. The DEPB rates have been increased by only 2% to 3% as against 5% announced earlier and even that has not been made operational for some unknown reasons. Exempting exports for all kinds of Service Taxes continue to remain ambiguous and Government policy of zero rating of exports exempting them of all indirect taxes appears merely rhetoric. Meanwhile, more and more services used by exporters keep getting trapped under Tax net, year after year. The price of imported mulberry raw silk and dupion is stable at US $ 24/ kg. Despite lower demand from India, it seems that the Chinese suppliers have kept the prices at the same level. Further market, especially from USA, are not booking bulk import orders.
MARKETING EFFORTS AND MDA
During the year 2006-07, we participated in five international fairs, and conducted three Buyer-Seller-Meets in Milan, Vienna and Athens. We participated in the IHGF in October, 2006 and we conducted an exclusive Silk Week programme at Greater Noida Expressway. Many contacts were made by the participants in these events and in the current year also these events are being repeated; we would like to participate in more fairs in 2007-08 and concentrate in the markets where we didn’t pay much attention earlier. Buyer Seller meets now days are not encouraging, as good number of serious buyers are not coming to buyer seller meets. Hence we feel it is better to participate in more number of good fairs in 2007-08 and also tap the new markets. During the year 2007-08, we have already participated in EVTEKS (Turkey), First Indian Fashion Fabric Fair in Dusseldorf and conducted a Buyer-Seller-Meet in London. Now days the buyer seller meets are not having good response.
FUTURE STRATEGIES TO BOOST EXPORTS
The Textile Ministry and to some extent Commerce Ministry are quite co-operative in arriving at workable export policy and procedures. However, as no finance related decisions are taken at these Ministries, despite strong recommendations, our problems are not solved till date.
From a level of US $ 335 million in 2000-01, we have reached an export of US $ 755 million in 2006-07 with a Compound Growth Rate of over 15%. Our ambitious goal is US $ one billion exports by the year 2007-08 again may have to be postponed by two more years. This is our ‘Medium term’ goal, as the govt. may like to put it. Our main strategies of achieving this would remain only on paper, if no
indirect encouragement are given to exports.
I must emphasize, speaking on behalf of exporters, a few things which we have been addressing to the Government:
i The export markets have become more demanding now. But the Government’s support is lacking.The main market USA has got severe cold and all developing countries have got the fever. The USA should create consumer demand there. Until then our efforts to improve exports may not meet the success.
ii Even the international trade fairs are lacking lusture. No buyers from America - even those who attend, no longer give bulk orders. The production wheel has slowed down very much. The dollar devaluation has made more difficult for the exporters and exporters have lost lot of money in dollar devaluation.Commissions paid to overseas agents and export service tax on it is still to be properly clarified. Vishesh Grama Udyog Yojana- This Yojana should be considered for Sericulture Industry and its exports, namely as it is an Agro based, Rural CottageIndustry.
iii The manufacturing cost has increased. Exporters are forced to sacrifice their profits as a consequence of lack of incentives from the Government.
iv The indirect costs like service tax have become more significant and they should be more compensated in the DBK Schemes.
v The MDA is still not adequate. It is time that Government encourages advertisements as 100% recoverable to the exporters, atleast through the EPCs. For participation in various fairs MDA should be given to all participants irrespective of their export turnover. Since silk export is facing a crisis and it is Agro based Rural Industry.
In spite of all these difficulties, we can achieve the target to a certain extent provided Government of India, Textile Ministry and Commerce Ministry comes to the rescue of the silk exporters. Our sericulture industry is Agro based, Rural based industry where 60% of women folks are working in the 60,000 villages, Sericulture and Silk Weaving is therefore “Gram Udyog” and should come under the “Vishesh Krishi & Grama Udyog Yojna”.We are time and again requesting the Government of India to bring the silk industry and its exports under purview of the above Yojna; but still it is not implemented. So we urge the Government to implement our suggestion urgently.
Surprisingly our pure silk textile insome of the countries are sold as Thai Silk! Hence it is time that we wake up and spend for our brand based promotion without giving a room for others to exploit us. We have requested the Textile Ministry to allot us Rs.5 crores under the silk mark scheme, for brand publicity of our silk textiles in overseas market. This is also pending.
vi During the deliberations on sessions of Tex-Summit 31st August – 1st September, 2007 in New Delhi organized by Ministry of Textiles, some of the points were raised including setting up of more silk processing units under SEZ, inclusion of silk sector under purview of “Vishesh Krishi & Grama Udyog Yojna”. Being, Sericulture industry is Agro based industry wherein 60% of women folks are working in the 60,000 villages, therefore “Vishesh Krishi & Grama Udyog Yojna” Scheme should be extended to silk sector.
The Indian Silk Publicity Funding Project was discussed with Ministry of Textiles,for granting of Rs. 1 Crore from the budget of Ministry of Textiles towards advertisement and publicity for promoting Indian Silk as a Brand. Council is awaiting
for proper response from Ministry of Textiles.
QUALITY AND MARKETING:
The quality of Indian silk has improved in the recent years, however the marketing strategies continue to be poor. When the markets are not doing well during the current year, poor marketing strategy will get poorer results leading to downfall of our exports and competitors gain by the situation.
We look forward to Heimtextil January 2008, Texworld and Silk India offering further boost to exports. I must emphasize that exporters should exercise caution in sending the right quality material and should not sell at low prices. Internal discipline is must for improvement.
While concluding, I would like to thank all of you, the officers in the Ministry of Textiles, Commerce, DGFT, Customs, Finance, Textile Commissioner, Textile Committee, Central Silk Board and other officers of the Government of India, and State Governments, the Members of the Committee of Administration and also the staff of the Council for their good service.
