Performance Analysis of Production and Trade of Indian Silk under WTO Regime

India is the second largest producer of silk and also the largest consumer of silk in the world having a strong tradition bound domestic market. In this paper, growth functions were estimated for India’s aggregate production and trade parameters using annual data from 1984/85 to 2006/07. To know the temporal price efficiency between the World (China) and Domestic market (India) the co-integration test was done for the period from 1991/92 to 2004/05. The performance analysis was done considering both mulberry and non-mulberry silk sectors at all India level for two sub-periods (Pre-WTO; 1984-85 to 1994-95 and Post-WTO; 1995-96 to 2006-07). The overall growth in production of cocoon and raw silk in India exhibited a decreasing trend with moderate instability. The overall performance of non-mulberry silk was encouraging as the growth rates were positive particularly in case of Eri and Muga. The import of silk goods increased both in quantity terms and in value terms during the study period. The co-integration tests showed lack of integration implying that, there was no long run equilibrium relationship between domestic and world market prices. The analysis of trade competitiveness measures showed country does not possess competitiveness in the production of raw silk.