Studies on Sericulture Development in India
|Course||Special Economic Animal Feeding|
|Keywords||India Sericulture Development Co-competition|
"The 21st centaury belongs to India", stressed many times by the Indian leaders. As the India’s economic reform, India has become one of the world’s most booming economical bodies nowadays. It is very significant to compare India with China in the all aspects in the world because the conditions of India are similar to China.Along with the economics success, the India’s sericulture has developed rapidly, which makes India the second largest silk production country after China. The consumption of silk in India steadily increases due to the quick expansion of Indian economy. Therefore, India has become the largest importer of raw silk from China. As the silk trading between the two countries mounts up, trading conflicts continues. India frequently accuses China dumping silk products, which makes very negative impact on China’s silk exportation.Therefore, by taking Geopolitics and Geoeconomics into consideration, we should study on the sericulture development in India, the only one biggest competitive neighbor with booming silk industry, in all aspects from strategy to tactics.This paper studies the history and current status of Indian sericulture, the administration, research, extension and education systems, the technology improvement and industry development and the relation between the silk market and the prices. Furthermore, the author synthesizes the exterior environments and interior factors that affect the development of Indian silk industry by using PEST and SWOT theories. The following conclusions can be drawn from the study:1. India is the major competitor of China in the international silk market. The reason is as follows: 1) The Central and State Governments have invested a lot of money into sericulture since 1950s. This investment catches up with the speed of the economy in India at the same period. 2) The sericulture industry develops rapidly. The annual production increases from 4000 ton in the early 80’s to the current 18000 ton. India is now the second largest silk producer in the world; 3) The major silk export market of India is in Europe, North America and Middle East, which highly overlaps with China’s export market. The international silk market, especially the western silk market will become the focus of the competition between the two countries in the twenty-first century; 4) India imports large amount of raw silk from China, and export it after processing. The profit India receives is much higher than what China gets; 5) The analysis of American silk market using Revealed Comparative Advantage Index (RCA) shows India has better advantage than China in HTS50 series of silk production.2. Adopt WinBUGS software to study the volatility of the silk price in India. The result shows the level of volatility of Indian silk prices is ordered as Bivoltine silk > Fresh cocoon > Charka silk>Filature/Cottage basin silk; The persistence level of the volatility is ordered as Filature/Cottage basin silk > Charka silk > Bivoltine silk > Fresh cocoon; The leverage effect is not significant as the estimations of the parameters are all close to 0. The noise level is ordered Bivoltine silk > Fresh cocoon > Charka silk > Filature/Cottage basin silk.3. The imported raw silk price from China is positively related to the native bivoltine silk price in India. Using EViews6 software, the author analyzes the co-integration and Granger Causality between the imported price of the raw silk from China (P_IM) and the native bivoltine silk price in India (P_DOME). Studies shows there exists co-integration between the two variables, the causality is significant. In addition, the author uses Minitab software to perform a regression analysis on P_IM and P_DOME. The result suggests that P_IM has the positive correlation with P_DOME. When the price of imported raw silk from China increases by 1 $US dollar/kg, the price of bivoltine silk at Bangalore silk exchanges will increase by＄US dollar/kg, holding other variables constant (vice versa).4. The Strengthens of Indian sericulture industry. 1) The Indian government places high level of attention on sericulture industry, and makes vast investments. 2) India established a complete system of laws, regulations and policies on sericulture, which protects the healthy development of the industry. 3) India has established an effective integrated extension system including research and education. 4) Under the consideration of Geopolitics and Geoeconomics, some international organizations and developed countries support Indian sericulture by investing both money and technologies. 5) The economic boom and the growth of middle class boost the consumption of silk. 6) Indian silk promotion system is every effective. The powerful domestic consumption of silk is the biggest motivation of the development of the industry. 7) Indian silk has a distinct culture characterization. The hand-made silk production is irreplaceable in the international market. 8) The expiration of textile quota act stimulates the export of silk production in India. 9) India has a long history of cultivating mulberry trees and raising silkworms. It is one of the traditional industries in India. 10) The tropical climate in India suits the growth of mulberry trees, and the silkworm can be reared around the year, which enables fast cash flow for the sericultural farmers; 11) India has finished basic establishments of sericulture; 12) There are ample labors in the rural areas of India, among which most are too conservative to leave their hometown to work. Thus, it provides the basic human resource to the silk industry. 13) The agrarian land in India is 30% more than that of China. It leaves a high potential for improvement.5. The Weaknesses of Indian sericulture industry. The Weaknesses appear in the following areas: 1) the government pays less attention on post-cocoon process than pre-cocoon process in the sericulture research and development. 2) There is a big gap in technology level between the laboratories and the fields.3) Too much of the industry investment is scattered to non-traditional sericulture producing states, which leads to unnecessary waste. 4) There are difficulties in producing high quality bivoltine silk in large area because of the tropic climate and the conservative concept of the fanners. 5) The price of high quality cocoons is lower than what it should be, which hinders the improvement of the cocoon quality. 6) Inadequate market linkages and the farmers have a hard time to sell their cocoons in states other than Karnataka. 7) The poor equipments in silk reeling and weaving make the most of the silk at non-grade levels. The raw silk with grade 2A or above used in high end silk production relies heavily on import. 8) Extreme fluctuations in cocoon and raw silk prices due to inexpensive Chinese silk import. 9) Appreciation of Rupee will have negative effect on the export of Indian silk.6. Improve Chinese sericulture industry with reference to the experience of India. Based on the pros and cons on the Indian sericulture industry, the author brings up several suggestions on improving the sericulture production in China: 1) Enhance the legislation on sericulture; 2) Reform and improve the current sericulture administration and extension systems in China; 3) Amend the research regime and increases investment on R&D; 4) The key for the development of sericulture industry is to promote the domestic consumption in China.7. China and Indian cooperate to create a new international silk trading setup. Silk industry in China and India has different features: while china produces mainly high quality bivoltine silk, India produces multi×bivoltine silk. While silk industry in China constitutes by mainly large industries, it constitutes mostly by manual workshop in India. While most silk production is for exportation in China, Indian silk production is largely consumed domestically. With the rapid development of the trading between the two countries, India is now the largest country for importing Chinese raw silk, which is used as waft to manufacture the qualified silk by Indians. The silk sari consumption in India drives the silk exportation of China.We must stand on a strategic level to evaluate the development of sericulture in both China and India and promote the passion of silk consumption in India. It is necessary to study carefully about the conflict in silk trading, improve the communication and trust between the two countries and avoid inappropriate actions which may hinder the silk trading.In a world globalization time, a country does not need to finish every single step in an industry. We need to keep specialization in mind, fully utilize comparative advantage, appropriately allocate resources, reinforce complementation, compete rationally, and hence establish a win-win trading scheme of world’s silk trading.