The Hindu : Karnataka / Bangalore News : Declining export orders spell doom for silk goods manufacturers

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Thursday, Jan 01, 2009
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Karnataka

Karnataka - Bangalore

Declining export orders spell doom for silk goods manufacturers

Laiqh A. Khan

Around 15,000 employees in the industry face an uncertain future

‘The industry will have no work if the demand does not pick up in the next one month’
Orders anticipated during Christmas and New Year failed to materialise: CSB

BANGALORE: The effect of recession in the U.S. has begun to knock ominously on the doors of export-oriented silk goods manufacturing units in the State, which have begun to feel the pinch of a substantial decline in global orders.

Several such manufacturers in the State, including 20 in Bangalore, had begun reducing the number of shifts for their employees ever since the export orders from the U.S., the U.K. and Germany came down to a trickle. When the existing orders are likely to be fulfilled by January-end or mid-February next year, the estimated 15,000 employees working in these industries will be staring at joblessness or an uncertain future.

Chairman of Indian Silk Export Promotion Council T.V. Maruti told The Hindu that several large silk manufacturing units will have no work after the existing orders are completed. “Several industries have not received fresh orders for the last few months.

Many orders have even been cancelled. The industry will have no work if the demand does not pick up in the next one month,” he said.

Though no manufacturing unit has begun layoffs yet, Mr. Maruti said that reducing shifts for the employees had begun. “For instance, we have only a single shift in place compared to two shifts earlier,” said Mr. Maruti, who runs two silk manufacturing units in Bangalore.

Exports account for a third of finished silk goods manufactured in India. Riding on this global patronage, the Central Silk Board (CSB) had set an export target of around Rs. 3,700 crore for 2008-09. But, contrary to CSB’s expectations, silk exports declined by 25 per cent during 2007-08, admitted sources in CSB. “Even the orders anticipated during Christmas and New Year have failed to materialise,” a CSB official said.

Levy increase

To make matters worse for the exporters, the Union Government has decided to increase the anti-dumping levy on raw silk imported from China, with effect from January 2009, which had raised its price by almost 10 dollars from $ 27.98 to $ 37.72. However, CSB’s Chief Executive Officer M. Sathiyavathi said the domestic market for silk has been largely insulated from the global recession. “The setback in the export market will be made good by the domestic market, where there is still a huge demand. That is the beauty of the silk industry,” she said.

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