Export of Silk (India)

A Project on

Submitted by:

(1) Bilal Waghmare (237)

(2) Bob D’Penha (208)
(3) Subramaniam Dasari (206)
(4) Prabhakar Vishwakarma (235)
(5) Amitkumar Khule (214)

Project Guide:
Prof .Zeenal Thakkar

Ramanand Arya Dayanand Anglo Vedic

College
Datar Colony, Bhandup (E)
Mumbai- 400 052

1
 Export of Silk (India)

DECLARATION

We ‘HIGH FLIGHERS’ of Ramanand Arya D.A.V

College of S.Y.B.M.S (4TH SEMESTER) hereby declare that we
have completed the project on “EXPORT OF SILK (INDIA)”.
The information submitted is true and
original to the best of our knowledge.

2
 Export of Silk (India)

ACKNOWLEDGEMENT

In modern complex trade, it demands many

professionals to develop International trade, which needs more
information than ever before. Their emphasis is on need to study
such subject like Import & Export Policy. We hope this project
work will be of considerable value to determine our knowledge in
the field of export.
This is the best part of our project where we are given an
opportunity to thank all the people who helped us directly or
indirectly to complete our project.
Our special gratitude also goes to dearest our Professor
Zeenal Thakkar who has given guidance, motivation, inspiration
and support by encouraging us.
Lastly we would like to thank to all those who are
directly or indirectly involved and helped us to complete our
project.

3
 Export of Silk (India)

CONTENTS

SR. TOPIC COVERED PAGE

NO NO
1 EXECUTIVE SUMMARY 1
2 OBJECTIVE & METHODOLOGY 2
3 HISTORY 3
4 GLOBAL MARKET SHARE 4
5 ABOUT SILKWORM 5-6
6 SILK WHY? WHERE? 7
7 SILK TYPES 8
8 FAMOUS SILK CENTRE IN INDIA 9-10
9 CENTRAL SILK BOARD 11
10 DEMAND AND SUPPLY OF SILK 12
11 RESULT 13-14
12 ITEM-WISE ANALYSIS 15
13 COUNTRY WISE EXPORTS 16-17
14 THE CHALLENGES OF INDIA &
PROSPECTS OF INDIA 18
15 INDIA CAN BEAT CHINA 19
16 EXPORT PROCEDURE AND 20-24
DOCUMENTATION
17 EXPORT INCENTIVE/ASSISTANCE 25-26
18 DESCRIPTIONS OF GOODS 27-28
19 FINDINGS 29
20 CONCLUSION 30
21 VARIOUS BILLS FOR TRADING 31-35

EXECUTIVE SUMMARY

4
 Export of Silk (India)

The export marketing is getting more and more

competitive day by day. This project is a study of “Indian Silk”
which is a sensitive item. The export policies have a direct bearing
on the domestic silk industry at large.
India is the 2nd largest producer and exporter of silk in
the world after China. We also have very big domestic silk sarees
market, which consumes 90% of the silk produced in India.
This project gives a brief idea about the export of silk:
History of silk, how the silk get processed, export earnings through
silk, different incentives/assistance given to the Indian silk
exporter, different competitors of Indian silk in the world market
and how India is safe in the 21st century.
Keeping the above in view, this project work covers the
valuable information on Export of silk, given in various topics to
the best of my knowledge and belief.
Let see the project in detail and understand the Indian
silk market in the world context.
The developed markets going more towards eco-
friendly textiles, natural fibre like silk can look-up with confidence
in the years to come. In order to make use of these situations, India
silk industry has to gear up itself to meet the future challenges
ahead.

OBJECTIVE

5
 Export of Silk (India)

The main objective of choosing this subject is to know

the contribution of India in the field of “SILK”.

The following are the objectives for making this project: -

 To study the India’s contribution in the field of export.

 To know exactly what is the position of Indian silk in the
world market.
 To know what are the procedure for exporting the product
“Silk”.
 To know that Is India safe when the world textile trade have
been integrated into WTO rules and regulations since 2005 at
the international level.
 To know what type of assistance/incentives get to the Indian
exporters.

METHODOLOGY

Following procedure have been adopted for making this

project more effective after visiting the council and going through
the topic about silk.

 Surf the net and site to get the valuable information.

 Refer some of the book.
 As gone through some of the magazine like “SILKNET”.
 A conclusion has been derived from the project.

HISTORY

6
 Export of Silk (India)

Silk is one of the oldest known textile fibers.

According to Chinese tradition, silk was used as long
ago as the 27th century BC. The silkworm moth was originally a
native of China, and for about 30 centuries the gathering and
weaving of silk was a secret process, known only to the Chinese.
China successfully guarded the secret until AD 300, when Japan,
and later India, penetrated the secrecy.
The ancient Persian courts used Chinese silks,
unraveled and rewoven into Persian designs. When Darius III, king
of Persia, surrendered to Alexander the Great, he was clothed in
such silken splendor that Alexander was completely overshadowed
and demanded as spoils the equivalent of $7 million in silk.
Silk became a valuable commodity in both Greece and
Rome, until AD 550 all silk woven in Europe was derived from
Asiatic sources. About that time, however, the Roman emperor
Justinian I sent two Nestorian monks to China, where, at the risk of
their lives, they stole mulberry seeds and silkworm eggs, secreted
them in their walking staffs, and brought them to Byzantium.
Thus, the Chinese and Persian silk monopolies ended.
With the spread of Islam, the silkworm came to Sicily and Spain.
By the 12th and 13th centuries Italy had become the silk center of
the West, but by the 17th century France was challenging Italy’s
leadership. The silk looms established in the Lyons area at that
time are still famous today for the unique beauty of their weaving.
The silkworm, however, did not flourish in the English
climate, nor has it ever flourished in the U.S. The first silk mill in
the U.S. was erected in 1810. With the advent of the power loom,
and with the help of the high tariffs introduced during the
American Civil War against imported woven goods, the American
silk-weaving industry entered a period of growth.

7
 Export of Silk (India)

Global Market Share

YEAR: - 1994

ABOUT SILKWORM

8
 Export of Silk (India)

SILKWORM, common name for the silk-

producing larvae of any of several species
of moths. Silkworms possess a pair of
specially modified salivary glands called
silk glands, or sericteries, which are used
in the production of cocoons. The silk
glands secrete a clear, viscous fluid that is forced through
openings, called spinnerets, on the mouthparts of the larva; the
fluid hardens as it comes into contact with air. The diameter of the
spinneret determines the thickness of the silk thread produced.
The best-known silkworm is the larvae of the common,
domesticated silkworm moth, Bombyx mori, of the family
Bombycidae. This moth has been cultivated for many centuries and
is no longer known in the wild state.
The female deposits 300 to 400 bluish eggs at a time;
the eggs are fastened to a flat surface by a gummy substance
secreted by the female. The larvae, which hatch in about ten days,
are about 0.6 cm (about 0.25 in) long. The larvae feed on leaves of
white mulberry, Osage orange, or lettuce. Silkworm caterpillars
that are fed mulberry leaves produce the finest quality silk. Mature
larvae are about 7.5 cm (about 3 in) long and yellowish gray or
dark gray in color. About six weeks after hatching, the common
silkworm stops eating and spins its cocoon. The length of the
individual fiber composing the cocoon varies from 300 to 900 m
(1000 to 3000 ft). The silkworm pupates for about two weeks; if
allowed to complete its pupation period, it emerges as an adult
moth.

Tearing during emergence damages the silken cocoon

beyond commercial use. Therefore, in the commercial production

9
 Export of Silk (India)

of silk, only enough adult moths are allowed to emerge to ensure

continuation of the species. The rest are killed by heat. Other
moths known as silkworm moths include the giant silkworm moths
of the family Saturniidae, particularly of the genus Antheraea.

World Raw Silk Production:

SILK- WHY?

10
 Export of Silk (India)

Silk is a high value but low volume product accounting

for only 0.2 % of world’s total textile production. Silk production
is regarded as an important tool for economic development of a
country as it is a labour intensive and high income generating
industry that churns out value added products of economic
importance. The developing countries rely on it for employment
generation, especially in rural sector and also as a means to earn
the foreign exchange.

SILK- WHERE?

Geographically, Asia is the main producer of silk in the

world and produces over 90 % of the total global output. Though
there are over 40 countries on the world map of silk, bulk of it is
produced in China and India, followed by Japan, Brazil and Korea.
China is the leading supplier of silk to the world with an annual
production of 81880 MT (2000). Out of Which the Mulberry raw
silk product is 78080 MT.
India is the second largest producer of silk and also the
largest consumer of silk in the world. It has a strong tradition and
culture bound domestic market of silk. In India, mulberry silk is
produced mainly in the states of Karnataka, Andhra Pradesh, Tamil
Nadu, Jammu & Kashmir and West Bengal, while the non-
mulberry silks are produced in Jharkhand, Chattisgarh, Orissa and
northeastern states.

SILK- TYPES

11
 Export of Silk (India)

There are four major types of silk of commercial

importance, obtained from different species of silkworms which in
turn feed on a number of food plants. These are:
 MULBERY
 TASAR
 MUGA
 ERI
Except mulberry, other varieties of silks are generally
termed as non-mulberry silks. India has the unique distinction of
producing all these commercial varieties of silk.

MULBERRY: - The bulk of the commercial silk

produced in the world comes from this variety and
often silk generally refers to mulberry silk. Mulberry
silk comes from the silkworm, Bombyx mori L that
solely feeds on the leaves of mulberry plant. These
silkworms are completely domesticated and reared indoors. In
India, the major mulberry silk producing states are Karnataka,
Andhra Pradesh, West Bengal, Tamil Nadu and Jammu & Kashmir
which together accounts for 92 % of country’s total mulberry raw
silk production.

TASAR: - Tasar (Tussah) is copperish colour, coarse

silk mainly used for furnishings and interiors. It is less
lustrous than mulberry silk, but has its own feel and
appeal.
In India, tasar silk is mainly produced in the states of
Jharkhand, Chattisgarh and Orissa, besides Maharashtra, West
Bengal and Andhra Pradesh. Tasar culture is the main stay for
many a tribal community in India.

12
 Export of Silk (India)

ERI: - Eri silk is the product of the domesticated

silkworm, Philosamia ricini that feeds mainly on
castor leaves. Ericulture is a household activity
practiced mainly for protein rich pupae, a delicacy
for the tribal. Resultantly, the eri cocoons are open-
mouthed and are spun. The silk is used indigenously
for preparation of chaddars (wraps) for own use by these tribals. In
India, this culture is practiced mainly in the northeastern states and
Assam. It is also found in Bihar, West Bengal and Orissa

MUGA: - This golden yellow colour silk is

prerogative of India and the pride of Assam state. It is
obtained from semi-domesticated multivoltine
silkworm. These silkworms feed on the aromatic
leaves of Som and Soalu plants and are reared on trees similar to
that of tasar.
Muga culture is specific to the state of Assam and an
integral part of the tradition and culture of that state. The muga
silk, and high value product is used in products like sarees,
mekhalas, and chaddars, etc.

13
 Export of Silk (India)

FAMOUS SILK CENTRE IN INDIA

SILK SILK CENTRE

Dharmavaram, Pochampalli, Venkatagiri,
Andhra Pradesh
Narainpet
Assam Sualkuchi
Bihar Bhagalpur
Gujarat Surat, Cambay
Jammu &
Srinagar
Kashmir
Bangalore, Anekal, Ilkal, Molakalmuru,
Karnataka
Melkote, Kollegal
Chattisgarh Champa, Chanderi, Rigger
Maharashtra Paithan
Kancheepuram, Arni, Salem,
Tamil Nadu
Kumbhakonam, Tanjavur
Uttar Pradesh Varanasi
West Bengal Bishnupur, Murshidabad, Birbhum

14
 Export of Silk (India)

CENTRAL SILK BOARD

Established in 1949 as a Commodity Board by Govt.

of India, is a premier organization for overall
development of sericulture and silk industry.
Headquarters – Bangalore.

VISION

 See India emerge as the leader in the world market for silk.

MANDATE
CSB is statutorily committed to: -
 Promote the development of the silk industry by all
appropriate measures, and for this purpose, in particular.
 Undertake, assist and encourage scientific, technological and
economic research in the silk sector.
 Devise means to improve cultivation of mulberry plantations
 Produce and distribute healthy silkworm seed.
 Improve the quality and production of raw silk and the
marketing of silk
 Advice and report to Govt. of India on all matters relating to
the development of the raw silk industry, including the
import and export of raw silk.

15
 Export of Silk (India)

MISSION
 Make continuous efforts in Research and Development and
Technology Transfer.
 To create greater opportunities for gainful employment and
improved levels of income in sericulture through spread of
scientific sericulture practices.
 To improve productivity in all stages of silk production
 Strengthen levels of efficiency through a commitment to
quality

SERVICES RENDERED BY CSB

EXPORT PROMOTION: -

 Disseminate information on exports of Natural Silk Goods

and Import of Raw Silk.
 Guidance to New Entrepreneur Exporters on procedures and
formalities.
 Export and Import Policy relating to silk.
 Incentives offered by the Govt. of India against exports of
silk goods.
 Imparting technical knowledge on silk manufacturing.

16
 Export of Silk (India)

DEMAND AND SUPPLY OF SILK

Silk from time to time is immemorial is considered to

be a symbol of luxury, elegance and sophistication. Being a natural
fibre, with all its natural qualities, silk always remained in demand.
From the royal wear to the present status of common man’s wear,
the transition of silk took over a period of two millennium.
Nevertheless, skill still has a special place in the Textile-kingdom
as silk. Natural fibres, which are eco-friendly, have an increased
preference over synthetics the world over especially in the
developed market. Therefore there is an increased preference for
textiles made out of natural fibres like silk in the developed
markets. This trend is being noticed even in the developing
markets too. Natural fibres therefore would sustain demand as
ideal clothing materials even in the day to come.
India has an ancient silk culture right from the pre-
vedics times. Silk has a sacred place in the cultural heritage of
Indian. It is a tradition that in India no religious rituals will be
complete without the use of silk. It is also a religious tradition for
the bride to wear silk saree in the soledom occasion of their
marriage irrespective of their economic condition. Silk industry in
India therefore caters to the vast saree market round the year. The
demand for raw silk by the saree industry is quite large. Thousands
of weavers, with their tiny weaving establishments are located at
the major weavings centres like Banaras, Mubarakpur,
Kanjeepuram, Salem, Dharmavarm etc. they need raw silk to run
their loom round the year.
India now produces around 15,000 metric tons of raw
silk. According to a rough estimate, the demand for silk in India by
both domestic and export sector is around 24,000 metric tons
leaving a gap of around 9000 metric tons.

17
 Export of Silk (India)

RESULT

“SILK EXPORTS - AUGUST 2006”

TABLE-1: TOTAL EXPORT EARNINGS OF SILK ITEM

(Value: Crore Rs. / Million US $)
August % Increase /
Item wise exports 2004 2005 Decrease
Rs. US$ Rs. US$ Rs. US$
Natural Silk Yarn,
156.99 34.18 105.7921.77 48.4 57.0
Fabrics, Made-up
Readymade Garments 37.01 8.06 43.58 8.97 -15.1 -10.2
Silk Carpet 5.75 1.25 6.09 1.25 -5.6 -0.1
Silk waste 0.00 0.00 1.52 0.32
TOTAL 199.75 43.49 156.9832.31 27.2 34.6
April to August % Increase /
Item wise exports 2003-05 2002-04 Decrease
Rs. US$ Rs. US$ Rs. US$
Natural Silk Yarn,
671.68 143.80588.58120.49 14.1 19.3
Fabrics, Made-up
Readymade Garments 210.82 45.13 264.0454.05 -20.2 2.0
Silk Carpet 31.63 6.77 38.82 7.95 -18.5 -49.9
Silk waste 1.83 0.40 8.42 1.72 -78.3 -60.0
TOTAL 915.96 196.10899.86184.21 1.8 -9.8

18
 Export of Silk (India)

“ITEMWISE ANALYSIS”

Natural Silk Yarn, Fabrics, Made-ups:

Natural Silk Yarn, Fabrics, Made-ups etc. account for

73.3% approximately to the total silk goods exports. During the
period April to March of the year 2003-04, exports of these items
touched 143.80 Mn. US$ (Rs. 671.68 crore) showing an increase
of 19.3% in dollar terms (14.1% in rupees terms) as compared to
corresponding period of the year 2002-03 i.e., 120.49 Mn. US$
(Rs. 588.58 crore). The major importing countries were U.S.A.,
Hong Kong, U.K. U.A.E., Italy, German, Spain, Saudi Arabia,
France and Singapore.

Ready-made Garments:

Ready-made Garments account for 23.0%

approximately to the total silk goods exports. They are also high
value-added items. Ready-made Garments recorded an export
earnings of 45.13 Mn. US $ (Rs. 210.82 crore) during the period,
April to August for the year 2003-04 indicating a increase of
16.5% in dollar terms (20.20% in rupee terms), when compared to
the same period of the year 2002-03 which was 54.05 Mn. US$
(Rs. 264.04 crore).
The major importing countries were U.S.A., U.K.,
U.A.E., Hong Kong, German P Rep, France, Italy, Saudi Africa,
and U.S.S.R., Indonesia.

19
 Export of Silk (India)

Silk Carpets:

Silk Carpet account for3.5% approximately to the total

silk goods exports. This segment recorded export earnings of 6.77
Mn. US$ (Rs. 31.63 crore) during the period April to August of the
year 2004-05 indicating a decrease of 14.8% in dollar terms
(18.5% in rupee terms), when compared to the same period of the
year 2003-04 which was 7.95 Mn. US$ (Rs. 38.82 crore). The
Major importing countries are U.S.A., German P Rep, Oman,
U.K., France, Australia, Saudi Arabia, U.A.E., Canada and
Singapore.

Silk Waste:

Silk waste, which is the raw material for the spun silk is
also exported in large quantities. Silkwaste export was very high in
the last few years. However, this year, there is a significant
decline. The decline of silk waste export was 77.3% in dollar terms
(78.3% in rupee terms), amounting to 0.40 Mn. US$ (Rs. 1.83
crore) during the period of April to August of the year 2003-04
compared to 1.72 Mn.US$ (Rs. 8.42 crore) for the same period in
the year 2002-03.The major importing countries are Thailand,
China Rep, Italy, Spain and U.A.E.
Export of silk waste and its by-products during April to
August period of the year 2003-04 compared to the corresponding
period of the year 2002-03 are shown in Table – 2

TABLE -2: EXPORT OF SILKWASTE

Period Quantity Value
(April to August) (MT) (Crore Rs.) (Mn. US $)
2004-05 94.698 1.83 0.40
2003-04 481.818 8.42 1.72
“COUNTRY WISE EXPORTS”

20
 Export of Silk (India)

USA, U.K., German P Rep, U.A.E and Hong Kong are the
top five countries importing Indian silk goods in value terms
during April to August period of the year 2004-05 and accounted
for 35.2%, 7.6%, 6.0% and 5.2% respectively of total export
earnings. They altogether accounted for 117.81 mn. US$ (Rs.
550.31 crore) which was 60.1% of total export earnings of 196.10
Mn. US$ (Rs. 915.96 crore) during the period. The country wise
silk export earnings during April to August period of the year
2003-04 along with the data of corresponding period of the year
2003-04 are shown in Table-3
TABLE - 3: COUNTRYWISE SILK EXPORT EARNINGS
(Value: Crore Rs. / Million US $)
COUNTRY
APRIL TO AUGUST
SHARE
COUNTRY
2004-05 2003-04 2003-04 2002-03
Rs. US$ Rs. US$ % %
U.S.A 322.4069.02 313.8564.25 35.2 34.9
U.K 69.99 14.98 74.72 15.30 7.6 8.3
GERMAN P
55.15 11.81 62.42 12.78 6.0 6.9
REP
U.A.E. 55.12 11.80 55.22 11.30 6.0 6.1
HONG KONG 47.65 10.20 48.18 9.86 5.2 5.4
ITALY 40.92 8.76 40.51 8.29 4.5 4.5
SINGAPORE 33.70 7.21 14.60 2.99 3.7 1.6
SPAIN 30.33 6.49 23.69 4.85 3.3 2.6
FRANCE 24.77 5.30 33.62 6.88 2.7 3.7
SAUDI ARABIA23.14 4.95 30.91 6.33 2.5 3.4
OTHERS 212.8045.56 202.1441.38 23.2 22.5
TOTAL 915.96196.10899.86184.21100.00 100.00
+ Refers to top 10 importing countries.

THE CHALLENGES AND PROSPECTS OF INDIAN SILK

INDUSTRY

21
 Export of Silk (India)

‘Indian Silk Industry: A Sector Study’ was done by the

Exim bank and released at the hands of Mr. Joy Oommen, Member
Secretary and CEO, Central Silk Board. The Study highlights the
prospects for the Indian silk industry, both from supply and
demand sides.
On the supply side, rapid industrialization in China and
Republic of Korea would open more export opportunities for India,
as these countries are likely to reduce land allocation for
sericulture practice. On the demand side, the Study identifies that,
apart from expected growth in developed countries, developing
countries of Asia are also showing an increasing interest in silk
products.
Besides, in the WTO arena, reduction in the present
high import tariff level for silk in developed country markets
would provide export opportunities for Indian silk exporters.
India is the world’s second largest producer of raw silk
after China. India’s share of 19 percent of global production,
however, is much lower than the 75 percent share of China. At the
same time, there is a large import demand for raw silk in India for
manufacturing value added silk products catering to export
demand.
The Study is part of endeavor to enhance the
competitiveness of Indian exporters. The efforts taken by Central
Silk Board on improving the productivity and quality of Indian silk
in order to compete in the international markets.
Silk exports, the Study delineates, account for 1.2
percent share in total Indian exports and 4.4 percent share in total
textile exports in 2000-01. Silk exports reached a record level of
US $ 530 million in the year 2000-01.

Over 50 percent of silk exports are in the form of

fabrics including dress materials, while silk garments account for

22
 Export of Silk (India)

24 percent and silk made-ups account for 13 percent. USA is the

major importer of silk, followed by the European Union and Japan.
Eco-friendly packaging is another aspect that has to be
addressed while exporting to the sensitive markets. International
campaign for promotion of silk products, product diversification,
exclusive brand promotion, and image building of silk as comfort
clothing are other elements of the export strategy.

INDIA CAN BEAT CHINA IN SILK PRODUCTION

23
 Export of Silk (India)

Chinese silk is heavy is useful only for pillow covers

and bed spreads and not for attires where as Indian silk which is
soft and light is for dress materials. In India the silk products are
being produced which is affordable even to the poor and the lower
middles class people.
Karnataka is catering to the 60 per cent of the national
demand and all round efforts are being made reach to higher reach.
Karnataka government has agreed to amend the Sericulture
Marketing Act to remove control on sale of cocoon and yarn. “The
Center is eager in this regard and the amendment will be done in
the next session of the legislature.
A situation is developing in China where silk
production is coming down on account of diversification to other
crops while domestic consumption is increasing. “India would like
to exploit this situation by going in for massive production of the
quality silk.
The exhibition which is the first of its kind in India has
brought together researchers, development and promotion
agencies, central and state organizations, silk handloom
cooperatives, self-help groups, traders and exporters.

EXPORT PROCEDURE AND DOCUMENTATION

24
 Export of Silk (India)

1. REGISTRATION STAGE: -
 Deciding the nature of the business: - The exporter must have
to decide the nature of the business. His choice will be one of
the following:
• Sole proprietor business.
• Partnership firm.
• Joint stock company.

 Opening of bank account: - An exporter has to select a bank,

which undertakes to fulfill all banking formalities connected
with negotiation of documents and realization of export
proceeds. The bank must be authorized to deal with “Foreign
Exchange”.

 Registrated with the Shop and Establishment Act: The

exporter has to registrated under this act and gets the
registrated “License Number”.

 Obtaining code number from DGFT: - This is another

formality, which every exporter has to complete without
which he cannot export any commodity. The code number is
known as “Importer-Exporter Code (IEC) Number”. This
code no. is granted by “DGFT (Director General of Foreign
Trade)”.

 Registration with the Silk Export Promotion Council: - The

exporter is required to register his firm with the “Indian Silk
Export Promotion Council” for securing various benefits
under the Import Export Policy.

 Obtaining GIR No./PAN No: - Income from export is

exempted from income tax for which he is required to

25
 Export of Silk (India)

register his firm with “Income Tax Authority”. For this

purposes he has to first get the GIR No./PAN No.

 Obtaining Sales Tax Number: - The exporter has to apply to

the sales tax authority for getting “Sales Tax Registration”
number. It is compulsory to get the benefit of sales tax
exemption.

2. PRE-SHIPMENT STAGE: -
 Sampling and Correspondence: - Before confirming the order
the seller send the sample of the silk material and
correspondence with the prospective buyer on the “terms and
conditions” of the order.

 Obtaining the confirmed order: - When the overseas buyer

accepts the exporter offer or the invoice, he sends a
confirmed order called “Indent” to the exporter. The exporter
should check foreign exchange regulations of the importer
countries.

 Obtaining a confirmed Letter of Credit: - Together with the

confirmed letter order the exporter may send a formal letter
to the buyer or importer to open a “Letter of Credit” in his
name.

 Preshipment finance: - As soon as the exporter gets the letter

of credit; he should approach his bank for securing
“Preshipment finance”.

 Production/Procurement of Goods: - The exporter has to

arrange for production of goods as soon as he gets the
“Preshipment finance” from the banks.

26
 Export of Silk (India)

 Packing and Marking: - The exporter has to arrange for

proper packing and marking of the goods. It must ensure
proper protection of the goods and quality of the packing
material. If necessary, the exporter can take the assistance
from the “Indian Institute of Packing (IIP)”.

 Silk-pre-shipment inspection: - Exporters will bring the

consignments of silk to the customs point. For each
consignment, an application for pre-shipment inspection in
prescribed forms of “Central Silk Board (CSB)” will be made
accompanied by two copies of export invoices, two packing
lists and a sample swatch of 6" square dimension.

 Appointment of C&F agents: - Dispatch of goods from India

to foreign countries is a technical job which the exporter
require the service of “C&F” agents. C&F agent ensures
smooth clearance of goods from the customs and collection
of negotiable documents.

3. SHIPMENT STAGE: -
 Arrangements of Internal transport from factory warehouse to
the port of shipment: - The exporter has to make necessary
arrangements for “transporting of goods” by rail or roads way
from his place to the port of shipment.

 Preparation and Processing of Shipping Documents: - when

the goods reach the port of shipment, the exporter has to
arrange for preparation of a complete set of documents. The
following documents must be submitted to the “Custom
Appraiser at the Custom House”.

 Export of Silk (India)

27
 Export of Silk (India)

 Commercial Invoice (ANNEXURE -1)

 Packing List or Packing Note (ANNEXURE -2)
 Warehouse Receipt (ANNEXURE -4)
 Mate’s Receipt (ANNEXURE -5)
 Letter of Credit
 Shipping Bill (ANNEXURE –7)
 Marine Insurance Policy.
 Proforma Invoice
 Central Excise
 Custom Procedure take Place – During First CSB Inspection

4. POST-SHIPMENT STAGE: -
 Submission of Documents by the Agents to the Exporter: -
The C&F agents submit the necessary documents to the
exporter to enable him to present the same to his bank for the
purpose of negotiation.

 Shipment Advice to Importer: - After the shipment of goods,

the exporter has to send suitable intimation to the importer
for his information it include detail like date of shipment,
name of the vessel, date on which goods will reach the
destination etc.

 Presentation of Documents to the Bank for negotiation: - A

complete set of documents is submitted by the exporter to his
bank for the purpose of negotiating the same and obtaining
export proceeds for the same. The following documents are
to be submitted and they are: -

 Bill of Exchange (ANNEXURE -3)

 Commercial Invoice
 Bill of Lading (ANNEXURE -6)
 Marine Insurance Policy
 Certificate of Origin and Consular Invoice

28
 Export of Silk (India)

 Processing of GR Form: - When the negotiating bank has

received payments, it will record on the duplicate copy of the
GR Formand forward it to the RBI. When they are found to
be alright the transactions is treated closed because the
required foreign exchange payment has already been
received.

29
 Export of Silk (India)

EXPORT INCENTIVES/ASSISTANCE:

Government of India offers various incentives and

facilities to Indian exporters in order to encourage and support the
export efforts, as the foreign exchange earned through exports is
vital to the country at a time of its adverse balance of payment
position. There are monetary as well as non-monetary incentives.
Exporters are provided with various export incentives/assistance
under different Export Promotion Schemes. The following of them
are listed:
 Exemption from Income Tax: -The single biggest incentive
that an exporter now enjoys is the exemption from income
tax. Export earnings were not subjected to income tax under
section 80-HHC. But from the year 2000-01, this benefit is
being phased out in 5 years time.

 Duty Free REP:(DFRC): - All silk exporters can avail of the

benefits under this scheme for the grant of Replenishment
license for import of raw silk free for custom duty on post
export basis.

 Other Assistance: - Exporters are also made available other

assistance and facilities to encourage exports such as excise
duty rebate, exemption from sales tax, Rail/ Ocean/ Air
Freight concession. MDA, Pre-shipment and post-shipment
finance from banks at low interest, ECGC etc.

 Duty Drawback: - Exporters who are not availing benefits

under DEEC or DEPB scheme can claim Duty Drawback
“NEW DRAWBACK RATES FOR SILK ITEMS”. The
Government has notified the new Duty Drawback Rates vide
Notification No. 12/2004 Customs (N.T.) Dated 29th January
2004. The Drawback Notification comes into effect from 9th
February 2004.

30
 Export of Silk (India)

Sr.No Sub Description of goods Rates of drawbacks Allocation

Sr.No.
1. Fabrics made out of Rs. 86.00 (Rs. eighty All
natural silk other than six only) per kg of silk Custom
made of Noil Silk Yarn. content
2. Fabrics made of Noil Rs. 24.50 (Rs. Twenty All
Silk Yarn four and fifty paise Custom
only) per kg of silk
content.
3. Readymade Garments Rs. 86.00 (Rs. eighty All
made wholly or mainly six only) per kg of silk Custom
of natural silk other than content.
made of Noil Silk Yarn
4. Readymade Garments Rs. 24.50 (Rs. Twenty All
made wholly or mainly four and fifty paise Custom
of Noil Silk Yarn. only) per kg of silk
content.
5. High fashioned Rs. 86.00 (Rs. eighty All
Readymade Garments six only) per kg of silk Custom
made wholly or mainly content.
of natural silk other than
made of Noil Silk Yarn
6. High fashioned Rs. 24.50 (Rs. Twenty All
Readymade Garments four and fifty paise Custom
made wholly or mainly only) per kg of silk
of Noil Silk Yarn content.
7. Handloom / Power Rs. 86.00 (Rs. eighty All
loom Lungies six only) per kg of silk Custom
(including Lungies content.
commonly known as
Sungits) made of
natural silk other than
made of Noil Silk Yarn

31
 Export of Silk (India)

8. Handloom / Power Rs. 24.50 (Rs. Twenty All

loom Lungies four and fifty paise Custom
(including Lungies only) per kg of silk
commonly known as content.
Sungits) made of Noil
Silk Yarn
9. Made-up articles made Rs. 24.50 (Rs. Twenty All
out of fabrics made four and fifty paise Custom
wholly or mainly of only) per kg of silk
natural silk other than content.
made of Noil Silk Yarn.
10. Made-up articles made Rs. 86.00 (Rs. eighty All
out of fabrics made six only) per kg of silk Custom
wholly or mainly of content.
Noil Silk Yarn

 Duty Entitlement Pass Book (DEPB): - The objective of the

DEPB scheme is to neutralize the basic custom duty on the
import content of the export product by granting duty credit
against export. Duty credit is calculated taking into account
the deemed import content of the export product as per the
Standard Input Output Norms and determine the basic
custom duty payable on the import content. Export credit is
fixed as a % of FOB value for exports which are as follow: -

ITEM %
SILK FABRICS 6
SILK MADEUPS 7
SILK GARMENTS 8

32
 Export of Silk (India)

FINDINGS????
After doing this project we came to know that what is the
demand and supply of the silk products in the world markets and
what the response of the marketers. And how India is facing the
challenges of foreign markets. The following are the findings: -
Increasing silk productivity and adhering to
international quality are two important requirements for
penetrating into developed country markets.
Indian silk export awaits a bright future in the day to
come. At a time when Japan the giant silk producers of
yesteryears, heavily downsizing its production due to migration of
sericulture labour to more greener pastures like the electronic
industry. There are various kinds of tariff and non-tariff barriers
coming in the way of Indian textiles exports today. All these
hurdles are expected to clear off when the world textile trade will
be integrated into “WTO” rules and regulation disciplined by
January 2005. In the recent part, a bit more liberal approach has
been adopted in the silk import policy by accounting raw silk
import under Duty Free Replenishment Schemes.
The Silk promotion circulates different type of
magazine in the markets to know the market condition and the
market price and some of the magazines are: -
“FAIDA” contains a column on ‘Tips, Tricks and Traps in e-
commerce’ (free weekly journal).
Despite the feel good factor in India shinning
campaigns are impressive, for exporters who are already suffering
because of dollar depressions as high as 10% from the last year
levels, the reduction in Duty Drawback and DEPB has come as a
blow, although not totally unexpected.

33
 Export of Silk (India)

CONCLUSION

It was pleasant experience while doing this project. As

this project deal with the Export of Silk (India). My main objective
of doing this project was to know the condition of Indian silk
exporter in the world market and where the India stands in it.
After doing this project I come to know how Indian silk play a
crucial role in strengthing the Indian economy. This project
comments that India is the 2nd largest producer of silk in the world
after China. India is going to have a bright future in the year to
come.
It is said that “SILK IS ALWAYS IRONED ON THE
REVERSE SIDE WHEN STILL DAMP”. Silk is hallmarked by its
natural imperfections. Nature is enhanced by the delightful
imperfections in silk. The export of silk material is good as
compared to other country.
There are various kinds of tariff and non-tariff barriers coming in
the way of Indian textiles exports and all these hurdles are cleared
off as the world textile trade had been integrated into “WTO” rules
and regulation disciplined since January 2005
Sericulture provides labour intensive and agro-based
cottage industries providing gainful employment to about 6.5
million people in the rural and semi-urban areas. We have various
type of authority like CSB, Silk Export Promotion Council they are
contributing a lot to the export of silk. The National Silkworm
Seed Project (NSSP) has been entrusted by the CSB with the
responsibility of production of quality silkworm seed. They also
provide various type of training; extension and seed support to the
sector also certifies the quality of silk goods export. “With time
and patience, the mulberry leaf turns into stain”.
The exporter gets various type of incentive like
“DEPB, DERC, DUTY DRAWBACK SCHEME, & OTHER
ASSISTANCE”. This is one of the motivating factors given to the
exporter to get more foreign exchange.

34
 Export of Silk (India)

INVOICE
Exporter Invoice No. & Date Exporter’s Ref.

Buyer’s Order No. & Date

Other Reference(s)

Consignee Buyer (if other than consignee)

Exporter Invoice No. & Date Exporter’s Ref.

INVOICE
Country of Origin of Goods Country of Final
Buyer’s Order No. & Date
Destination
Other
INDIAReference(s)

Consignee Terms of Delivery

Buyer (if other thanand Payment
consignee)

Pre- Carriage by: Place of Receipt by Pre-carrier

Vessel/Flight No. Port of Loading

Port of Discharge Place of Delivery Country of Origin of Goods Country of Final

Destination
Marks & Nos./ No. & Kind of Description of Goods INDIA Quantity Rate Amount
pkgs
Container No.

Terms of Delivery and Payment

Pre- Carriage by: Place of Receipt by Pre-carrier

Vessel/Flight No. Port of Loading

Amount Chargeable Total
Port of Discharge Place of Delivery
(In words)
Marks & Nos./ No. & Kind of Description of Goods Quantity Rate Amount
pkgs
Container No.
DECLARATION:
We declare that this invoice shows the actual price of the goods
Signature & Date For
described and that all particulars are true and correct.
Authorized Signatory

Amount Chargeable Total

(In words)

DECLARATION:
35
We declare that this invoice shows the actual price of the goods
Signature & Date For
described and that all particulars are true and correct.
Authorized Signatory
 Export of Silk (India)

PACKING LIST

Exporter Invoice No. & Date

Buyer’s Order No. & Date

Other Reference(s)

Consignee Buyer (if other than consignee)

Country of Origin of Country of Final Destination

Goods

INDIA

Pre- Carriage by: Place of Receipt by Pre-carrier

Vessel/Flight No. Port of Loading

Port of Discharge Place of Delivery

Marks & Nos./ No. & Kind of pkgs Description of Goods Quantity Remarks
Container No.

Signature & Date For

Authorized Signatory

36
 Export of Silk (India)

BILL OF EXCHANGE

VALUE DATE

PAY THIS FIRST (SECOND UNPAID) BILL OF EXCHANGE

TO THE ORDERS OF

THE SUM OF

AGAINST INVOICE NO

DATED

DRAWN ON FOR

AUTHORISED SIGNATORY

37
 Export of Silk (India)

BILL OF LADING

BL NO.
REF. NO.

Shipper
Consignee
Notify Address
Pre carriage by Place receipt
Vessel Port of loading

Port of Discharge

Item Description Weight Measurement

Particulars given by the exporter

Freight details
Charges etc.

Freight payable at Place and date of Issue

No. of original B/L

Signature

38
 Export of Silk (India)

MATE’S RECEIPT

SHIPPING COMPANY
DATE

Received in good order and condition on board the for

. The under mentioned goods from .

Item Description Weight Length Marks

This receipt is to be exchanged for company’s Bill of Lading.

Signature
(Mates)

39
 Export of Silk (India)

WAREHOUSE RECEIPT

WARHOUSE COMPANY

STORAGE INTIMATION

NO. DATE:
M/S.

Sr.No. Particulars Nos. Weight Lorry No. Remarks

N.B. FOR
1) Weight and Quantity not checked by us.
2) We are not responsible for any shortage
and damaged of the material.
Godown in charge/ M.

40
 Export of Silk (India)

SHIPPING BILL

SHIPPING BILL Signature

FOR GOODS UNDER CLAIM FOR DRAWBACK

Port Bombay Exporter’s Name Address

Name of Vessel Master of Colour Port at which goods to be dispatched

Agents

Packages Details of goods to be given separately for each class or Description

Remarks
Number & Marks & Quantity Descriptions Value No. and Amt of Country of
Description Number of Goods date of Drawba final
Unit Amt Rate Amt
s in words duty ck Destinations
and figures bill

Entered No. Let Export under I/We hereby declare that the parti-
Rotation No Preventive Supervision culars given above to be true.

I/We claim the usual drawback on

the abovementioned goods.

Assistant Collector of Customs Signature of the exporter or his Authorized

Agents

41
 Export of Silk (India)

42