**Executive Summary**
This document presents the Minister of Textiles' response to an unstarred question regarding the traditional handloom production sector, specifically focusing on raw silk and silk yarn, the protection of weavers and artisans in Uttar Pradesh, and the status of unutilized Input Tax Credit (ITC) for MSMEs in Banarasi silk and Chikankari work. The question was scheduled to be answered on February 3, 2026.
**Key Points / Main Content**
* **Customs Duty and Tax Structure:**
* Raw Silk: 16.5% Customs Duty, NIL GST
* Silk Yarn: 16.5% Customs Duty, 5% GST
* The Customs Duty includes a Basic Customs Duty (BCD) of 15% and a Social Welfare Surcharge (SWS) of 10% of BCD.
* The current duties aim to provide a level-playing field for sericulture farmers and the domestic industry against imports.
* **Schemes to Protect Livelihoods:**
* The Ministry of Textiles is implementing schemes to protect weavers and artisans, and to sustain traditional handloom production:
* National Handloom Development Programme (NHDP)
* Raw Material Supply Scheme (RMSS)
* Under NHDP, financial assistance is provided for procurement of upgraded looms, construction of worksheds, product diversification, brand development, e-commerce facilities, concessional loans, and social security, among other initiatives.
* Under the Raw Material Supply Scheme, the Ministry provides transport subsidies and a 15% price subsidy on various types of yarn.
* **Support Provided in Uttar Pradesh:**
* 34 Handloom Clusters have received financial assistance of Rs. 22.19 crore.
* 30 marketing events were organized to promote handloom product sales.
* 13 Handloom Producer companies were formed to enhance productivity and marketing capabilities.
* 8.23 lakh kg of subsidized yarn was supplied.
* **Input Tax Credit (ITC):**
* There is no identifier for a registered person working in a specific product or industry within GST returns.
**Impact Analysis**
**Stakeholder: Sericulture Farmers and Domestic Industry**
* **Impact:** The customs duties aim to provide a level-playing field, helping them compete with imports.
* **Action Required:** No immediate action specified in the document.
**Stakeholder: Weavers and Artisans in Uttar Pradesh**
* **Impact:** Schemes such as NHDP and RMSS are designed to protect their livelihoods and sustain traditional handloom production, and promote the sales of their products.
* **Action Required:** Eligible handloom agencies/workers need to apply and participate in the various programs offered.
**Stakeholder: Micro, Small and Medium Enterprises (MSMEs) in Banarasi silk and Chikankari work**
* **Impact:** Delayed ITC refunds impact their working capital.
* **Action Required:** The document doesn't suggest they are required to take further action.
Key Entities Referenced
Ministry of Textiles: The central ministry responsible for implementing schemes related to handloom production.
National Handloom Development Programme (NHDP): A scheme providing financial assistance for various aspects of handloom development.
Raw Material Supply Scheme (RMSS): A scheme providing subsidies on yarn to reduce production costs for handloom weavers.
Uttar Pradesh: The state specifically mentioned regarding the support for weavers and artisans shifting to cheaper synthetic yarn.
GST: Goods and Services Tax, a tax on the supply of goods and services.
LOK SABHA
UNSTARRED QUESTION NO. 595
TO BE ANSWERED ON 03.02.2026
TRADITIONAL HANDLOOM PRODUCTION
595. SHRI PUSHPENDRA SAROJ:
Will the Minister of TEXTILES वस्त्र मंत्री
be pleased to state :
(a) the present customs and tax structure applicable to raw silk and silk yarn used in traditional sectors
such as Banarasi silk and Chikankari;
(b) whether any review has been undertaken in view of the lower effective duty on imported finished
synthetic fabrics under recent trade agreements, if not, the reasons therefor;
(c) the steps taken by the Government to protect the livelihood of weavers and artisans in Uttar Pradesh
who are shifting away from pure silk to cheaper synthetic yarn due to higher input costs, and the support
provided to sustain traditional handloom production; and
(d) the amount of unutilised Input Tax Credit (ITC) pending with Micro, Small and Medium Enterprises
(MSME) units engaged in Banarasi silk and Chikankari work in, and the impact of delayed ITC refunds
on their working capital, district-wise?
उत्तर
ANSWER
वस्त्र राज् य मंत्री (श्री पबित्र मार्घरे रटा)
THE MINISTER OF STATE FOR TEXTILES
(SHRI PABITRA MARGHERITA)
(a) & (b): The present customs duty and tax structure applicable to raw silk and silk yarn is as
follows:
Customs Duty GST
Raw Silk 16.5%* NIL
Silk Yarn 16.5%* 5%
*(Basic Customs Duty (BCD) of 15% & Social Welfare Surcharge (SWS) of 10% of BCD)
The current customs duties are prescribed in order to provide adequate level-playing field for the
sericulture farmers and the domestic industry vis-à-vis imports.
(c): The Ministry of Textiles is implementing following schemes to protect the livelihood of weavers
and artisans and to sustain traditional handloom production across the country including Uttar Pradesh:
1. National Handloom Development Programme(NHDP);
2. Raw Material Supply Scheme(RMSS);
Under NHDP, financial assistance is provided to eligible handloom agencies/workers for procurement of
upgraded looms & accessories, solar lighting units, construction of workshed, product diversification &
design innovation, technical and common infrastructure, publicity and brand development through India
Handloom Brand (IHB), Handloom Mark (HLM) and GI tag, e-commerce facilities, marketing of
handloom products in domestic/overseas markets, concessional loans under weavers’ MUDRA scheme
and social security etc.Under the Raw Material Supply Scheme, the Ministry provides transport subsidy for transportation of all
types of yarn to the doorstep of the beneficiaries and 15% Price Subsidy on Cotton Hank yarn, Domestic
Silk, Woollen & Linen yarn and blended yarn of natural fibres. This scheme provides support for quality
inputs to handloom weavers, aiming to reduce the production costs.
Under the above schemes, the following supports have been provided to weavers of Uttar Pradesh during
the last three years and current year:
i. 34 Handloom Clusters provided financial assistance of Rs.22.19 crore.
ii. 30 marketing events organised to facilitate and promote sales of Handloom Products.
iii. 13 Handloom Producer companies have been formed to enhance productivity, marketing
capabilities and facilitate better incomes.
iv. 8.23 lakh kg of subsidized yarn supplied under Transport subsidy & Price subsidy; 1,18,339
handloom organizations/weavers benefitted.
(d): As in GST return, there is no identifier for a registered person working in a specific product or
industry.
****