GROWTH PROSPECT S OF THRUST AREA OF INDIAN EXPORT

WOOLEN INDUSTRY
Submitted by: ADITYA JHUNJHUNWALA KRITIKA SIBAL LUBHANA JUNEJA SURABHI PALIWAL

SURYA PRATAP SINGH SWATI JAIN TANUPRIYA KHURANA Section B OVERVIEW

The story of wool began long ago, before recorded history when primitive man first clothed himself in the woolly skins, of the wild sheep he killed for food. He had discovered a durable fabric which gave him what nothing else could give: protection alike from heat and cold, from wind and rain. A versatile fabric which kept him cool in the heat of the day and warm in the cold of the night, which could absorb moisture without feeling wet. Man can never match it. No other material, natural or man-made, has all its qualities. But man can refine and improve wool. He has done so by selective breeding of sheep and by incorporating in wool fabrics such qualities as shrink resistance, durable creasing and pleating, mothproofing, shower-proofing and stain-proofing. Science and technology have kept wool in the forefront of fabrics, adapting to modern needs without impairing its virtues. Wool is part of Britain's history and heritage, more so than any other commodity ever produced in these islands. It was woven into cloth here in the Bronze Age which began about 1900 BC. But in historical terms this is comparatively recent. Elsewhere in the world, primitive man had domesticated the sheep in 10 000 BC. By the time the Romans invaded these islands in 55 BC the Britons had developed a wool industry and this was encouraged by their new masters. Roman emperors cherished British woollen cloth-'so fine it was comparable with a spider's web'. The Saxon invasions in the fifth century nearly destroyed the industry. But it is known that in the eighth century Britain was exporting woollen fabrics to the Continent and after the arrival of the Norman conquerors in 1066 the industry expanded. By the twelfth century wool was becoming England's greatest national asset. Cloth making was widespread, particularly in the large towns of southern and eastern England nearest the Continent.

But the greatest wealth came from exports of raw wool. Kings and their ministers keenly appreciated the revenue that resulted from exports and export taxes-and for the power it gave to the king who could grant, or withdraw, concessions to the wool towns and to the industry.

Weaver's trade guilds, powerful for hundreds of years, were founded to guarantee good work by experienced craftsmen. The `Staple' was established-a mart where raw wool for sale abroad had, by law, to be sent and where the export tax levied by the king could be collected. The Staple was originally located in Flanders-an important textile manufacturing area-but was later withdrawn to England where a number of ports became Staple towns. The peak of production was reached in the thirteenth century. Then the wool trade declined for a long period because of political strife. In 1331 King Edward III encouraged Flemish master weavers to settle here. They and their descendants were to play a part in the final ascendancy of English cloth.

The export trade in raw wool recovered and the first half of the fourteenth century was a time of prosperity for English wool farmers But it was overshadowed by the long war with France (export taxes on wool were one of the principal means of financing the war) and by bubonic plague (the Black Death) which in 1349 decimated the population. In many villages as much as three-quarters of the population died. This led to an increase of the sheep flocks, for there were not enough people left to cultivate the land for arable crops. Despite setbacks, raw wool exporting expanded, and so also did manufacturing of wool fabrics. This was becoming both specialized and localized. The West Country had three advantagesextensive sheep pastures, a supply of soft water for washing, scouring and dyeing, and waterpower to drive milling machinery. Similarly, the Pennine districts of Yorkshire and Lancashire had soft water, and water power from steeply graded streams. The Industrial Revolution of 1750-1850 caused upheaval. It ushered in new inventions stemming

from the Lancashire cotton industry, to mechanize and speed dramatically the processes of spinning and weaving. Manufacturing methods, unchanged Since the revival of the trade in the fourteenth century, were now superseded. Mechanization had been opposed in the past and it was again. In the Luddite riots of 1812 equipment was destroyed by organized bands of workers, who feared they would lose employment.

here are nearly one thousand million sheep in the world and some thirty million are in the United Kingdom. But these figures tell only part of the story, for the influence of British breeds is world wide. Sheep can adapt themselves to an extraordinarily wide range of environment. In this country there are about forty recognized breeds, suited to the varieties of climate, soil, herbage and terrain encountered here. Some of the more famous of these breeds form the foundation stock in all those parts of the world where sheep are significant-notably in the great grassland countries of the southern hemisphere. So the skill of British breeders has had widespread effect, stemming from the eighteenth century when the great Robert Bakewell of Leicestershire pioneered new techniques not only in breeding but also in husbandry. Bakewell's work represented a great leap forward, but he was not the first in the field. It has taken centuries of selective breeding and cross-breeding to produce the sheep of today. The two main types of woven cloth are woollen and worsted. The yarn for woollen cloth is usually made from short-fibred wool and during processing the individual fibres are thoroughly intermingled. In the worsted process, which uses the longer-fibred wools, the individual fibres are separated and laid approximately parallel to each other. Weaving is not involved in all types of wool fabrics. Knitted fabrics are made with a single, continuous yarn (insteadof two-warp and weft-as in woven cloth) and the threads are interlooped. Felt-probably the first-ever wool fabric-is made by intermingling the wool fibres and compressing them into a sheet.

Because of the different purposes for which it is suited, raw wool must first be graded and sorted-long wools for the worsted trade, short wools mainly for the woollen trade, the tough springy wools for carpets and so on. Whatever the final requirement, wool must next be cleaned in a soap solution to remove its natural grease and dirt. Machinery is then employed to extract seeds and burrs and other foreign matter which may remain. Short wools are passed through `scribbling' and `carding' machinery which produces 'slivers'-thin continuous ropes of wool-which in the spinning process are drawn out and twisted into yarn. The longer wools for worsted production are put through a 'comb' which produces ropes of parallel fibres known as 'tops'. These are then drawn out into finer and finer threads in the spinning process.

Before weaving, the yarn which is to form coloured cloths is dyed. Then on to the modern, high-speed power loom which can create an inexhaustible variety of weaves and patterns. There are a number of finishing processes. Woollen cloth must be shrunk and felted by being passed through rollers and soap solutions. The nap (surface) is raised by passing the cloth through drums set with the heads of teasels (spiky plants) and then cropped by a kind of mowing machine. Raising and cropping are not needed for worsted where the aim is to display, rather than conceal, the weave pattern. Despite the development of complex and elaborate machinery, the basic principles of spinning and weaving machines are the same as when primitive man first twisted raw wool into yarn between his fingers and then, on his crude loom, wove it into cloth.

The medieval loom remained substantially unchanged until, in 1733, John Kay invented his `flying shuttle' which was driven mechanically to and fro across the warp without having to be thrown 'by the weaver. Automatic spinning followed. Sir Richard ArkWright's roller-spinning machine was horse-driven at first and later, by water power, when it became known as the waterframe. In 1767 James Hargreaves, a Blackburn weaver, invented the spinning jenny, with multiple spindles mounted side by side. With this development one spinner could operate as many as 120 spindles at a time. Samuel Crompton's spinning mule combined the principles of both the water-frame and the jenny. The spindles were no longer stationary but mounted on a movable carriage. This travelled away from the rollers, drawing-out the wool threads which at the same time were twisted by the spindles to impart strength--a principle still used on spindles all over the world.

Other machines were invented for preparing wool for weaving. They included the combing machine, used in the worsted industry for combing the long wool fibres parallel and removing the short fibres; and the carding machine for opening out, blending and straightening the wool fibres after cleansing. Eventually power was applied to all the mechanical processes. By the beginning of the nineteenth century Watt's steam engine was in the Yorkshire mills. By the end of the century hand loom weaving had practically disappeared. The way now lay ahead for continuing development-added refinements, improved quality and increased speed of manufacture which have made wool today, as in the past, the most valued fabric in the world.

PRODUCTION CENTERS
INDIA: Though Tirupur and Ludhiana are considered to be the major production centers of knitting yarns and garments in India, there are other centers in various parts of India which are equally important as well. India has a long tradition of knitwear. Starting as a hobby, knitting has today emerged as growing industry. Knitting centers exist in different parts of India Amritsar Jalandhar Gurdaspur Mohali Sialkot Dhariwal Kashmir Gujarat Patiala Kangra Shimla Kapurthala Hoshiarpur

DOMESTIC INDUSTRY
India wool Industry was a predominantly unorganized and scattered industry until the economic liberalization of Indian economy in the 1990s. After the opening up of the economy, the Indian wool industry witnessed a stupendous growth. The Indian Wool Industry is an important industry since it is one of the prominent sources of livelihood for the rural India and it represents small, medium, and large scale units. The India wool Industry is smaller in size in comparison to other textile industries in India. The main wool producing states of India are Rajasthan, Punjab, Jammu & Kashmir, Karnataka, Gujarat, Uttar Pradesh Uttaranchal, Andhra Pradesh, Maharashtra, and Haryana. Punjab alone accounts for 40% woolen units, while Haryana accounts for 27%, Rajasthan for 10%, and the rest of the states account for the remaining 23%. The bulk of the wool that is produced in India is of coarse quality and used mainly in the manufacture of hand-knitted carpets. The rest are being used for the, manufacture of apparel, blankets, finished textiles, garments, knitwear, etc. Further, the India wool Industry also caters to civil and defense requirements for warm clothing for the Indian Army. The Indian Wool Industry is the 7th largest in the world and it accounts for about 1.8% of total world production of wool. Strengths of Indian wool Industry are as follows: Huge woolen textile production capacity Efficient multi-fiber raw material manufacturing capacity Large pool of skilled and cheap work force Entrepreneurial skills Huge export potential Large domestic market Very low import content

Weaknesses of Indian wool Industry are as follows: Increased global competition in the post 2005 trade regime under WTO Imports of cheap textiles Use of outdated manufacturing technology

Poor supply chain management Huge unorganized and decentralized sector High production cost Low quality out put

Usage of Wool Sectors Medical Usage Second Skin Injury Prevention, Medical Sheepskins, Wound Dressings, Pressure Bandages, Bandages Root Insulation, Upholstery, Quilts, Blankets, Drapes, Wall Coverings, Carpets Police Uniforms, Military Uniforms, Socks & Gloves, Childrens Nightwear, Firefighters Uniforms, Infant Apparel Interior trimmings, Flight Attendant Apparel, Aircraft Interiors, Interior Sound Proofing Air Conditioning, Sound & Vibration Control, Heat Exchangers, W ool Filters for Dust/Chemical Odours, Electrostatic Filters, Toxic Chemical Filter Sheepskin boots & garments, Pullovers, Hats, Uniforms, Fashion Garments, Waterproof Garments, Machine washable suits, Non-Woven garments, Apparel Accessories, Milinery, Flannels, Thermal underwear, Woven garments

Architecture Protective Apparel Aviation Protection In Industry

Smart Textiles Sports

Vital signs vest, Molecular Templating, Intelligent Knee sleeve, Inherenity conductive polymers Ski Wear, Billiard Cloths, Thermal underwear, Baseball Filling, Olympic Uniform, Waterproof Fabrics, Sportwool Clothing

Manufacturing

Piano Felts, W ool filters for dust / Chemical Odours, Gaskets & Washers, Buffering Pads, Air/Dust Filters, Absorbs Toxic Metals, Baby Blankets, Sheepskin Seat Covers

The Ministry of Textiles under the Government of India has taken some significant steps to: Increase production both qualitatively and quantitatively Research for rapid development of woolen products & woolen industry in India Increased export of woolen product

The woollen industry in the country is small in size and scattered. It is primarily located in Punjab, Haryana, Rajasthan, U.P., Maharashtra and Gujarat, with 40% of units being in Punjab, 27% in Haryana, 10% in Rajasthan, while the remaining 23% in rest of the States. The industry provides employment to approximately 12 lakh people and contributes significantly to industrial production. The Woollen Industry falls under: -

i) Organized Sector: a) Composite Mills b) Combing Units c) Worsted and Non-worsted Spinning Units d) Machine made Carpetmanufacturing Units ii) Decentralized Sector: a) Hosiery and Knitting b) Powerloom c) Hand-knotted Carpets, Druggets and Namdahs d) Independent Dyeing Processing Houses The indigenous production of fine quality wool required by the organized mills and the decentralized hosiery sector is very limited, therefore country depends largely on import, Australia being the major supplier. The New Zealand wool, rich in lustre, is mainly imported for carpet sector for blending it with indigenous wool. The import of pre-mutilated woollen/synthetic rags is also allowed under OGL for the shoddy sector.

MAJOR COMPETITORS
New Zealand's largest single wool exporter and has materially improved its financial performance over the last 12 months. "Shareholders have and will receive the benefit through dividends. 'WSI creates an option for all wool exporters to scour wool to a high standard at competitive prices. "This has occurred against a backdrop of running interference in its markets over this time. During the past year WSI has increased its share of total wool scoured by more than 10%. This is the result of our superior quality and efficient processing performance. Australia, New Zealand, Pakistan, China etc are the major countries from which India meets its import requirements for raw wool. New Zealand's largest single wool exporter. Australia, the largest producer of wool in the world. On the other hand, production of wool in China, the second largest wool producer, is on an upward trend.

On the export front, UK, Italy, USA, Dominican Republic and UAE for woolen yarn, fabrics and made-ups, while USA, UAE, UK, Germany and France for readymade wool garments.

Wool Industry Export Promotion Council It is an autonomous, non-profit Export Promotion Council, sponsored by the Ministry of Textiles, which has become the international face of Indian woolen textiles successfully facilitating exports. Major Functions Arranging Buyer-Seller Meets in India and abroad. Arranging trade fairs and exhibitions Foreign delegation to India and arrange their tour programmers. Exploration of overseas markets. Resolving shipping &transport problems. Advise on export finance, banking and insurance. Market Study Resolving shipping &transport problems.

Products for Exports Shoddy & woolen yarn and fabrics Wool tops Wool hair belting Felt and machine made carpets

 Woven shawls, scarves and stoles

Exports during 2007-08 to 2010-2011

Major functions of WOOLTEXPRO Foreign delegation to India and arrange their tour programmes. Arranging Buyer-Seller Meets in India and abroad.

 Maintaining close liaison with the International Wool Textile Organization, Wool mark Company, Wools of New Zealand, Australian Wool Innovation, etc. Arranging trade fairs and exhibitions. Implementing programmes for enlarging and improving the production base of the Woolen Industry. Exploration of overseas markets.

Quality Standard AWI (and its affiliate companies) own and license the Wool mark brand, which provides a unique, global fiber quality assurance scheme for the industry and consumer alike, allowing companies to use one of our logos as an independent quality endorsement on their products. The Wool mark logo is the most recognized textile symbol in the world. It represents a long-term commitment to quality spanning more than 45 years. The Wool mark logo has been applied to over 2 billion garments. In addition to the Wool mark brand, for products containing 100% pure new wool, we offer brands for blends. A number of services to our Wool mark licensees aimed at adding value to their business: 1. Wool supply chain 2. Wool mark Manufacturing Sourcing 3. Wool mark specifications and testing 4. Product development initiatives 5. In-store AWI marketing promotion 6. Australian wool retail training packages 7. Fashion and color trends 8. Support for members

Measures taken by the Council:

Wool Industry Export Promotion Council (WOOLTEXPRO) organized Indian Textile Mega Show in South Korea and Japan during November, 2010 in collaboration with Australian Wool Innovation. Thereafter Indian Textile Mega Shows were organized in Latin American Countries during December, 2010. The shows had good participants and had plenty of visitors from various sectors of the industry and consumers. It is eagerly awaited that Indian Textile Mega Shows are held as quickly as possible as lot of interest were shown in the Indian products. Ambassador of Chile had close interaction with the participants of WOOLTEXPRO and hoped that such events will be organized in larger scale for fullest utilization of export potentialities in these countries. Participants and visitors expressed that Indian textile products have proven excellent in quality and events were considered remarkable as the very first step of business meeting. Companies in

these countries considered Indian textile companies as potential lucrative business partners. Companies in these countries expect organization of such events in immediate future to bring in actual demanding products such as yarn and fabrics. Some of the Indian companies have booked orders for their products and are very much eager to participate in the events that may be organized by Wool Industry Export Promotion Council in future. Wool Industry Export Promotion Council (WOOLTEXPRO) participated in Tex-Trends India, 2011 with the financial assistance from the Central Wool Development Board and have taken 450 sq.mtrs. area where major member-mills - Raymond, OCM, Digjam & Reid & Taylor participated in the fair. In addition, we had participants from Kashmir and Kullu. WOOLTEXPRO had a theme pavilion of 63 sq.mtrs. where our theme presentation was Warmth of Nature and the 2nd catch line was Wool go Natural. WOOLTEXPRO had depicted the evolution of wool fibre from primitive stage to modern functional fibre of everyday use. The presentation theme focused on Nomadic, Ethnic, Flash, Travel depicting the usage of wool fibre in every walk of life and also the forecast entrants for year 2011 were displayed. It is a matter of grate happiness that one of our member-exporters Grover International won the best display award in the best display category. The Honble Minister of State for Textiles presided the function for awarding the participants. The then Honble Minister of Textiles, Thiru Dayanidhi Maran and Honble Minister of State for Textiles, Mrs.Panabaaka Lakshmi and other high officials visited our stand and were very happy with the theme of WOOLTEXPRO. Wool Industry Export Promotion Council (WOOLTEXPRO) had organized B2B Exhibition in Milano, Italy during June, 2011. This event was inaugurated by a Senior Designer and Director (Wool), Ministry of Textiles, Government of Indi. Wool Industry Export Promotion Council (WOOLTEXPRO) had chosen to organize the B2B exhibition in Milano so that there could be one to one interaction with Indian manufacturers and buyers/wholesalers/designers of woollen products in Italy. This platform provided direct supply base to Italian importers of Indian woollen textile products. There is tremendous scope for enhancing this business as Milano being the hub of global fashion and trends and also Italy is one of the thrust areas of Indias exports.

PROVISIONS IN FOREIGN TRADE POLICY

The wool and woollen textiles industry is a rural based, export oriented industry in which the organized sector, the decentralized sector, and the rural sector complement each other. The country is the seventh largest producer of wool and contributes 1.8 per cent to total world production.Of the total production of raw wool, 5 per cent is apparel grade, 85 per cent carpet grade, and 10 per cent coarse grade. Rajasthan (44 percent), Jammu & Kashmir(13 percent),Karnataka (12 percent) alongwith Gujarat, Uttar Pradesh, Andhra Pradesh, Haryana (23 percent) are the major wool producing states in the country. There are 718 woollen units in the organized sector, and a large number of units in the small scale sector. Ludhiana alone accounts for 225-240 units in the decentralized hosiery and shawl sector. The installed capacity of the industry is about 6.04 lakh worsted spindles, and 4.4 lakh nonworsted spindles. Wool combing capacity is around 30 million kg., whereas, the synthetic fibre combing capacity is 3.57 million kg. There are approximately 7,228 powerlooms in this industry. A small quantity of specialty fibre is obtained from Pashmina goats and Angora rabbits. There are 958 woolen units in the country, the majority of which are in the small scale sector. During the XIth Five Year Plan period (2007-12).The Government is implementing the following Schemes for the holistic growth and development of Wool Sector:(i) Integrated Wool Improvement & Development Programme (IWIDP), (ii) Quality Processing of Wool and (iii) Social Security Scheme. The Schemes are being administered in the major wool producing States by the Central Wool Development Board (CWDB), Jodhpur, through respective State Government Organizations / NGOs, Societies, Cooperatives, etc. Promotional measures in department of commerce. ASIDE (Assistance to States for Infrastructure Development and Exports):- The ASIDE Scheme will encourage the State Governments/Union Territories to promote exports by creating appropriate export infrastructure and by providing facilitation for export promotion. 20% of the total fund will remain with the Union Government 80% of the funds will be given to State Governments/Union Territories.

MAI (MARKET ASSISTANCE INITIATIVES):- Market Access Initiatives (MAI) Scheme is an Export Promotion Scheme. It formulated on focus product-focus country approach to evolve specific market and specific product through market studies/survey.

FMS (FOCUS MARKET SCHEME): Objective To offset the high freight cost and other disabilities to select international markets with a view to enhance export competitiveness Duty free credit scrip equivalent to 3% of FOB value of exports made from Aug. 27, 2009 Notified countries set out in Appendix 37 C Focus Markets (Table 1- American, African, East European, Asian and CIS-CAR block) New Focus Markets (Table 2- Latin American and Asia-Oceania block)

Entitlement

Eligible exports all goods to notified countries Ineligible exports Supplies to SEZ units; Service exports; Ores and Concentrates; Diamond and other precious, semi precious stones; Gold, silver etc.. Cereals of all types; Sugar, of all types; Milk & milk products Crude / Petroleum Oil

Imports allowable Duty Credit Scrip and goods imported there under are freely transferable Inputs or Capital goods which are otherwise freely importable under ITC Proof of landing critical for availment of the benefit Cenvat / Drawback Additional Customs duty / Excise duty paid, can be adjusted as Cenvat credit or Duty drawback

Others

FPS (FOCUS PRODUCT SCHEME): Objective To incentivise export of such products, having high employment intensity in rural and semi urban areas To offset the inherent infrastructure inefficiencies and other associated costs involved in marketing of these products

Entitlement & Eligibility Exports of notified products to all countries entitled for duty free credit scrip equivalent to 2% (5%-special products) of FOB value of exports for each licensing year Following exports shall not be taken into account for credit entitlement Deemed exports Exports made by SEZ units or SEZ products exported by DTA units EOUs / EHTPs / BTPs whore availing direct tax benefits / exemptions Exports through transshipment

Imports allowable Duty Credit Scrip and goods imported there under are freely transferable Inputs or Capital goods which are otherwise freely importable under ITC Cenvat / Drawback Additional Customs duty / Excise duty paid, can be adjusted as Cenvat credit or Duty drawback Focus Market Scheme or Vishesh Krishi and Gram Udyog Yojana

Others

This scheme is an alternate option to

MDA (MARKET DEVELOPMENT ASSISTANCE) :- As per MDA guidelines, Any exporter who is a member of WOOLTEXPRO with at least 12 months of membership and export turnover of the company less than 15crores rupees in the preceding financial year can avail the MDA grant for participating in overseas trade fairs.

Future Plan
For the holistic growth and development of Wool Sector, the Government is making serious efforts to achieve the following objectives by 2012. Increase yield of specialty wool fiber viz., Pashmina and Angora. Improve fineness of wool by 2(micron) Increase wool yield per animal by25% Reduce annual mortality of sheep by10% Widen the uses of the coarse and coloured decanni wool (Southern region) by product development and diversification. Increase the demand for Indian wool in domestic and international market.

Problems / Challenges faced by the exporter

There are infrastructural problems that stand in the way of bilateral trade Indian exporters say that in the absence of effective banking system, it is difficult to open letter of credit and they have to negotiate with their counterparts directly Need to open warehouses/ showrooms in CIS region through the Council

Relevant News Articles

AWI to unveil wool campaign in India Australian wool innovation ltd (AWI), a leading Australian wool organization will begin an initiative to educate the Indian consumers about the various good but forgotten properties of wool. September 23, 2011 (India) J&K considering revival of woolen industry-The government of Jammu and Kashmir is seriously considering the revival of the woolen industry in the State, for which it is evaluating various project reports submitted by different agencies. July 24, 2010(India)-Growth of wool industry affected by dipping demand-With decreasing demand for wool products, the wool industry seems to be going through a rough patch. June 20, 2011 (India)-Produce low-cost yarn using local wool Minister :- Mr. SS Slathia, the Jammu and Kashmir Minister for Industries and Commerce, while reviewing the operations of the J&K Handloom Development Corporation, stressed on the need for producing low-cost yarn using locally available wool, so as to sustainably develop the domestic industry.

References
http://www.wooltexpro.com/index.html http://www.wwepcindia.com/ http://dgft.gov.in/ http://en.wikipedia.org/wiki/Woolen http://www.foreign-trade.com/