Slowdown in US and German economies coupled with rupee appreciation against dollar and Chinese competition have eaten into India's silk exports, which have fallen by over 25 per cent last fiscal.
"Total silk exports declined by about 25 per cent last fiscal, mainly due to slowdown in the US and Germany," Indian Silk Export Promotion Council Vice-Chairman Subhash Mittal said.
Silk exporters are already hit by rupee appreciation and competition from Chinese firms, Mittal said, adding that of the total 50 lakh workers in the sector, over 100,000 have lost jobs.
Rupee had risen over 12 per cent against dollar in 2007.
The industry is apprehensive that the situation could worsen this year due to deepening of the US economic slowdown, which is spreading to other economies as well.
According to a senior official in the textiles ministry, silk exports for 2007-08 stood at $650 million, falling short of the $825 million export target by 27
per cent.
During April-December 2007, silk exports from India declined by 28 per cent and stood at Rs 1,927 crore ($476.73 million) against Rs 2,464 crore ($540 million) during the corresponding period of the previous year.
Of the total silk exports, shipments to Germany constitute about 35 per cent, while to the US, it is 20-25 per cent, Mittal said. Silk exports to the US declined to $104.42 million in 2007-08 from $145.9 million in the previous fiscal, while shipments to Germany declined to $25.39 million from $30.80 million, he added.
In order to boost overseas sales from the sector, the government has decided to give export benefits like duty-free credit facility at 2.5 per cent to exporters of certain silk products with effect from April 1, 2008.
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