The textiles ministry is pursuing procuring raw silk and cotton from overseas markets to ensure long-term availability of the products.
For silk, the government has signed memoranda of understanding (MoUs) with Kazakhstan, Uzbekistan and Tajikistan under a buyback arrangement for processing and other downstream production activities. This would be the first ever vertical integration of manufacturing value chain in the world, said an official source associated with the development.
For cotton, too, the ministry has begun talks with African countries such as Kenya, Uganda, Chad, Tanzania, Ethiopia and Ghana.
India is the second largest producer of silk next to China, contributing 18 per cent to the world’s production. It is also the largest consumer of silk in the world.
If the proposal firms up, it would be the first-ever overseas direct investment venture of India in commodity farming. However, officials said the buyback of the entire silk from these countries is tricky since the producer has the option of selling the produce in the international market or ship it back to India.
“It will ultimately be a price sensitive decision. Albeit, there are provisions of buyback arrangement in the MoU. Enforceability is an issue,” said sources.
“It is cost effective to grow silk in these countries and then ship it back to India for processing, consumption or export, than developing the infrastructure in India to grow silk production,” said another official source.
The proposal is to help augment the production of raw silk in these countries, which is currently pegged at 100-200 tonnes through one crop a year. The effort of the government is to increase silk production in these countries to 1,000 tonnes each by increasing the number of crops to two or three but without increasing the total acreage.
Sources said if the acreage goes up, then production may touch 10,000 tonnes due to favourable weather in these countries for silk production.
In India, major mulberry silk producing states are Karnataka, Andhra Pradesh, West Bengal, Tamil Nadu and Jammu and Kashmir, which together account for 92 per cent of the country’s total mulberry silk production. In 2010-11, the area under raw silk production stood at 16,360 mt.