SN Jhunjhunwala, president of the association told reporters at a press conference on Tuesday that the silk industry is suffering from a huge gap in the demand and supply positions.

"The annual demand of raw silk in India is around 25,000 to 30,000 tonne, while our production is only to the tune of 14,000 tonne. The exporting units of the silk industry is importing around 5,000 tonne of silk through Advance and Special Import Licenses. This results in a huge gap between the demand and supply," Jhunjhunwala said.

The president of association also alleged that this gap is covered by smuggling from Nepal and Bangladesh. "Nepal and Bangladesh is importing huge quantities of raw silk but they hardly have any units for processing it. Our apprehension isthat most of this raw silk is coming into the country. The Government must take necessary steps to prevent this," Jhunjhunwala said.To support his point, he added that the government can earn revenue by allowing imports of raw silk. "It can reduce the revenue deficit of the country, which is becoming a major problem for the Union finance ministry," he added.

In 1997-98, exports of silk goods were to the tune of Rs 926.28 crore up by 5.2 per cent from Rs 880.44 crore of the previous year. The association has also asked the Government to announce a special policy for the silk industry.

"Another area of weakness is the lack of policy support from the government to overcome the inherent poor raw material base. In fact, the silk industry is yet to get a taste of liberalisation and is still shackled by licences.

The industry's growth will be more impressive if we get a moral support from the Government," Jhunjhunwala said.