The Directorate General of Anti-dumping and Allied Duties (DGAD) observed that there was "prima facie" evidence to show casual link between the dumped imports of silk fabrics from China of the weight of 20-100 gm per metre and injury caused to the Indian industry.

It pointed out that parameters like significant fall in production, closure of several power looms, decline in sales, drop in employment, loss of market share, decline in profitability and losses to the domestic industry prima facie indicated that it had suffered "material injury" due to dumping.

Silk fabric is manufactured in India in both power looms and handlooms but the anti-dumping investigation only for the former has been chosen. The investigation period is from April 1, 2003 to September 30, 2004.

State-owned Central Silk Board, and Mysore Power Loom Silk Manufacturers' Cooperative Society and some other weavers' groups made the complaints about dumping of Chinese silk.

However, Silk Garment Exporters' Association has expressed the fear that initiation of anti-dumping probe could threaten prospects of value addition in silk exports from India and encourage smuggling from China.

"There is a shortage of satin silk fabric in the country which is one of the main fabrics used for value added exports. The quality of Indian chiffon and georgette are inferior compared to the Chinese silk. So, any move to impose anti-dumping duty on Chinese silk imports would be counter-productive," association patrol P Samuel Jacob said.

India is dependent on China for raw materials. In the global silk trade, India ranks two after China, which controls 90 percent of the more than $2.5 million market. India needs nearly 30,000 tonnes of silk for value added exports while domestic silk production is estimated to be just 15,000 tonnes, according to industry sources.

Exporters view that the government should help silk producers and weavers to improve the quality of their products and help face a competitive environment rather than giving them protection.

Samuel said China may not only capture Indian export markets if prices of Indian silk exports goes up due to increase in domestic raw materials "but even beat us in our own turf unless we remain competitive’’.