SECTION V: WOOL

TABLE OF CONTENTS
SUMMARY – WOOL ............................................................................................................................ 326 5.1. WOOL & WOOLLEN PRODUCTS: INTERNATIONAL SCENARIO ........................................... 331 INTRODUCTION............................................................................................................................ 331 GLOBAL TRADE ............................................................................................................................ 335 5.2. WOOL & WOOLLEN PRODUCTS: INDIAN SCENARIO ........................................................... 337 INTRODUCTION............................................................................................................................ 337 BLENDING OF SYNTHETIC FIBRE WITH WOOL ....................................................................... 342 FOREIGN TRADE .......................................................................................................................... 344 INDUSTRY SUB-SEGMENTS ....................................................................................................... 348 5.3. INDUSTRY OUTLOOK ................................................................................................................. 350 CONSUMPTION ............................................................................................................................ 350 EXPORTS ...................................................................................................................................... 351 5.4. ISSUES AND CONCERNS OF INDIAN WOOL INDUSTRY ........................................................ 353 IMPORT DUTY STRUCTURE ....................................................................................................... 353 AVAILABILITY OF WOOL IN DESIRED QUANTITY AND QUALITY ........................................... 354 PRESENCE OF LONG CHAIN OF INTERMEDIARIES ................................................................ 357 5.5. POLICY RECOMMENDATIONS FOR THE WOOL INDUSTRY .................................................. 358 FISCAL MEASURES ..................................................................................................................... 358 NON-FISCAL MEASURES ............................................................................................................ 360 5.A. ANNEXURE .................................................................................................................................. 365 INTERNATIONAL SCENARIO ...................................................................................................... 365 GLOBAL TRADE ............................................................................................................................ 368 COUNTRY STUDY ........................................................................................................................ 373 INDIAN SCENARIO ....................................................................................................................... 383 FOREIGN TRADE .......................................................................................................................... 384 ISSUES AND CONCERNS OF USER INDUSTRIES .................................................................... 390 COMPOSITION OF THE SUB GROUP ON WOOL ...................................................................... 393

324

325 .

the largest producer of wool in the world.8 kg/sheep/year. the year 2008 witnessed significant decline in exports across different categories. at 0. has been witnessing falling production over the years. Thus.064. IV. which includes domestic production and imports. In sheep population. During 2008-09. while USA. Pakistan. Germany and France are the leading markets for India’s exports of readymade wool garments. recorded a CAGR of 3% during the period between 1991-92 and 2008-09. 326 . Bulk of the wool produced in India is of coarse quality and used mainly in the manufacture of handknitted carpets. The wool growing community as also the various user industries are currently facing several challenges on account of the current state of affairs.39 million tonnes in 1990 to 2. Consumption. with production having fallen from 3. UK. The Report attempts to discuss the international scenario with respect to the wool industry.4 kg/sheep/year. III. Australia. UAE. International Scenario World production of greasy wool has been on a decline since the past several years. India ranks among the leading five countries in the world. and proposed solutions to meet the various challenges facing the industry. On the other hand. Dominican Republic and UAE are the major countries for India’s exports of woollen yarn. the wool productivity is much lower than the world average. the second largest wool producer. and adequate policy intervention is required to improve the prospects of the overall industry. overall exports of wool and wool blended products are estimated to have declined by 8. Also. However. China and New Zealand are the world’s leading producers of wool. is on an upward trend. Demand for wool exceeds domestic production. V.3 crore.8% to total world production. fabrics and made-ups. D&B India’s outlook on the prospects of the Indian Wool & Woollen products Industry going forward. the Indian scenario.SUMMARY – WOOL I. New Zealand. since India produces a lot of value added products that are exported. wool productivity in India is much lower than the world average of 2. II. mainly on account of fall in sheep population.4% to around Rs 5. Australia. given the inadequate quality and quantity of wool produced in India. China etc are the major countries from which India meets its import requirements for raw wool. UK. Although India is among the leading countries in terms of sheep population. Italy.11 million tonnes by 2008. On the export front. production of wool in China. Australia. the country imports substantial amount of wool. the key issues and concerns faced by the industry currently. USA. Indian Scenario India is the seventh largest producer of wool and contributes 1. substantial amount of raw wool is imported. In line with the fall in global demand for woollen products.

inadequate processing facilities. ISSUES AND CONCERNS X. consumption is expected to grow at a CAGR of 7. Also. AVAILABILITY OF WOOL IN DESIRED QUANTITY AND QUALITY XI. Exports of readymade wool garments are expected to post a CAGR of 19. Import duty structure The domestic industry is highly dependent upon imports of apparel grade wool.8 million kg by 2019-20. fabrics and made-ups expected to record a CAGR of 11.VI. high sheep mortality. Imports of raw wool are estimated to increase significantly going forward. and rising preference among sheep growers for heavier sheep for mutton purpose. VII. small and medium scale units engaged in the production of low cost woollen fabrics and blankets are dependent on wool waste.8%. and inadequate testing facilities and quality control measures. and this growth rate is estimated to be maintained for the period between 2015-16 and 2019-20 also. because of which the industry is unable to improve its cost-competitiveness.6% during the period between 2009-10 and 2014-15.9% during the period between 2015-16 and 2019-20. lack of development of high wool yielding sheep breeds. and of 21. inadequate cross-breeding and selective-breeding practices.5% during the period between 2015-16 and 2019-20. which can be attributed to absence of grading system at the sheep breeders’ level. imports are estimated to grow at a CAGR of 11. which can be attributed to slow growth in sheep population. use of crude form of carding by the handloom industry which results in low productivity. During the period between 2009-10 and 2014-15. Domestic production of raw wool is estimated to grow at marginal rate going forward. wool growers not receiving remunerative prices. and an accelerated CAGR of 13.2 million kg in 2008-09 to 260.7%. Carpet grade wool Their exists inadequate quantity of locally produced wool. For the period between 2009-10 and 2014-15. raw wool consumption (production + imports) is estimated to double. they are estimated to grow at a CAGR of 10. IX. During the period between 2009-10 and 2014-15.1%. VIII.1% during 200910 to 2014-15. and this growth rate is estimated to be maintained during the period between 2015-16 and 2019-20 as well. for which the industry is dependent upon imports. and woollen & synthetic rags for their raw material requirements. with exports of woollen yarn. These inputs attract high duties of 914%. lack of motivation for adopting modern methods of sheep management. domestic production is estimated to grow at a CAGR of 1%. from 114. There also exists inadequate quality of domestic wool. 327 . D&B India expects exports of woollen products to continue with their strong growth. Industry Outlook During the next one decade. and for the period between 2015-16 and 2019-20.

Shawl/scarf industry This industry is facing high raw material cost pressure as prices of wool and other inputs such as acrylic. and are also being exploited by various intermediaries. 328 . Marketing of wool is mainly in the hands of the private wool merchants and traders. Absence of grading mechanism In the absence of grading mechanism. particularly from Pakistan and Nepal. as they are being exploited on account of the long chain of intermediaries. The dependence on imports makes the sector vulnerable to the vagaries of movement in international wool prices and fluctuating exchange rates. etc). XVII. Presence of long chain of intermediaries Wool growers are unable to fetch higher price for the wool produced. it is also facing severe competition from China. while the industry has to face weakened demand on account of the global slowdown. Use of outdated processing technology The processing and finishing of wool products is a weak link which requires huge capital investment. which results in inadequate quality of finished products. XV. Also. On account of these reasons. Angora. XVI. XIII. the industry is using old/outdated machinery and technology in the processing segment. the industry is currently using old/outdated technology. Apparel grade wool India is almost entirely dependent on Australia for importing Merino wool for apparel making as apparel grade wool has a mere 5% share in annual wool production in India. Also. have witnessed sharp increases in the recent past. sometimes running up to as many as 4-5 intermediaries. particularly in the organised sector.g. On the export front. Use of traditional shearing practices (hand shearing) affects the length and quality of fibre. the domestic carpet industry faces stiff price competition from other exporting countries. XVIII. there exists inadequate and outdated processing facilities for growers of specialty fibres (e. and wool passes through various intermediaries before reaching the consumers. etc. viscose yarn. Also. shepherds currently earn just Rs 20-25 for per kg of wool. Shoddy industry One of the major problems the shoddy industry in India faces is the high cost of raw material. Therefore. high transaction cost adds another 20-25% on the cost of the raw material. wool growers are forced to sell their produce at unremunerative prices/below market price. there is lack of encouragement among wool growers to produce better quality wool. Carpet industry On account of the insufficient quality of wool and high wool prices. polyester. Because of this reason. the industry is unable to attract foreign manufacturers in the Domestic Tariff Area sector.XII. Lack of proper pre-loom and post-loom processing facilities ultimately affects the quality of the finished products. and the decentralised sector uses traditional or outdated technology. in the case of hand-made woollen carpets. Another concern faced by the industry is that there is ban on shoddy units from being set up in SEZs/EOUs. Pashmina. Moreover. which affects the quality of the produce. XIV.

Policy Recommendations XIX. Check mortality rate Government policy should focus on extending proper nutritional support facility. Establishment of an agency on PPP model to ensure 329 . and government should organise healthcare programmes for better management of sheep at farmers’ level. and also to improve the quality of Deccani wool (ii) Efforts should be made for selective breeding and for cross breeding of imported sheep breeds with inferior and widespread local breeds (iii) Efforts should be focused on implementing programmes for producing highland wool in the hilly tracts of India (iv) Provision of adequate extension support for marketing of specialty fibres. Database building Building of national level database on production. to ensure availability of reliable and timely data to the industry. and the fact that the domestic industry will not be able to produce adequate quantity of raw wool. Duty structure rationalisation Given the gap between demand and domestic production. XXV. and the non-fiscal measures are required to provide boost towards improving the quantity and quality of wool in India. The research should focus on breed improvement and overcoming the diseases in sheep breeds and producing diseaseresistant stud rams. D&B India has made certain policy recommendations for the Indian wool & woollen products industry towards a sustained long-term growth. Common facility centres Provision of one-time support to private players to encourage setting up modern processing facilities. XXVI. Non-fiscal measures XXI. XXII. including financial assistance to import machinery. with necessary support from the government. XXIV. Grading system and marketing support Introduction of scientific grading system to incentivise the sheep breeders by way of better wool prices. The fiscal measures mainly include rationalisation of the import duty structure in wool and woollen products. Improve the quality and quantity of wool (i) There should be increased thrust on cross-breeding programmes with an aim to bring down the micron structure of the carpet grade wool. These are discussed below: Fiscal measures XX. exports and imports. There is also a need to rationalise import duty on waste of wool and bring it at par with raw wool since we are dependent on imports. XXIII. there is a need to rationalise import duty on raw wool and on woollen yarn & fabrics. Collaborative research projects The industry should undertake collaborative research projects with the major wool producing countries. and adequate healthcare and veterinary facilities.

Increased allocation of funds to the Board to enable it to achieve its laid objectives in an effective manner. Strengthening the Central Wool Development Board Review and redefining the role of the CWDB to make it more effective and to enable it to perform the tasks assigned to it appropriately. to be done in close collaboration with wool producers and the user industry. 330 . XXVII.providing wool growers with the right price for their produce and to ensure procuring wool in substantial quality.

the world sheep population has failed to increase. Wool fibre has a marginal share of 1. China and New Zealand are the world’s leading producers of wool. Exhibit 5. accounting for close to 13% of total population.2% Wool 32.0% 65.1. There has been a decline in sheep population in Australia by 10.5. in 2008. Australia. India has a 6% share in world sheep population (2008). In 2008. In 2008.9% Cotton 1.1. India’s sheep population has improved by a marginal 1. world production of greasy wool recorded a decline of 3%. its sheep population fell by 6. 331 .1.1: World fibre production: 2008 (% share) Silk MMF 0.3% Source: FAO of the United Nations.3% to around 1.6% Flax 0. In fact.1. China has the largest sheep population in the world. Globally. WOOL & WOOLLEN PRODUCTS: INTERNATIONAL SCENARIO INTRODUCTION 5. over 2007.1.1% in 2008.3% in 2008. the world sheep population declined by 1.6% (2008) in world fibre production.6%.08 billion sheep. Poimena/Delta Sheep population falls in 2008 5. over 2007.2.

) 1.8 6. From as much as 3. in Annexure – 5.0 85.1. Global wool production on a downtrend Greasy 5.) 172. 332 .11 million tonnes by 2008.25 1.2: World sheep population (Bn nos.90 1990 1995 2000 2005 2007 2008P Source: IWTO Exhibit 5.2 650.Exhibit 5.1 Share (%) 15.3 For detailed list of country-wise sheep population.6 5.7 7.9 4.1.5 1097.3.20 1.95 0.1.1.05 1.39 million tonnes in 1990. please see Exhibit 5.4 64.15 1.A.7 72. World production of greasy wool has been on a downward journey since the past several years. Wool production (greasy) in 2008 was 3% lower than production in 2007.3 52. world wool production (greasy) has come down to 2.A.00 0.1.10 1. – International Scenario.8 59.3: World sheep population by country (2007) Country China Australia CIS India Iran Others Total Source: IWTO Population (Mn nos.

0 53.3 239.6 165.4 2.7 1.0 3.399.1 153.1 32 2008P 21 19 10 8 3 3 2 2.4 50.7 2.0 363.9 41.2 213.4 2005 520.6 30 2000 29 13 11 6 3 2 2 2.1 31 2007 22 17 10 8 4 3 2 2.3 28 1995 28 11 11 9 3 3 3 1.7 44.6 Change (%) -8.0 Exhibit 5.4 969.6 2008P 437.2 32 333 .1 75.5 257.0 393.1.9 44.1 -7.1 1995 731.5: Share of countries in world wool production: Greasy (2008P) (%) Countries Australia China New Zealand CIS Argentina United Kingdom South Africa India Others Source: IWTO 1990 32 7 9 14 4 2 3 1.1 53.4 -5.0 277.9 827.1.189.0 45.0 2.3 473.171.106.5 217.0 1.6 405.6 42.9 47.5 237.6 75.4: World wool production by country: Greasy ('000 tonnes) Countries Australia China New Zealand CIS Iran India Others Total Source: IWTO 1990 1.6 2007 477.4 129.1 32 2005 24 18 10 7 4 2 2 2.6 836.Exhibit 5.0 205.3 2000 666.596.4 765.9 765.100.4 -3.0 292.5 2.5 309.8 3.3 11.4 288.0 2.282.0 46.143.9 0.1 172.

Exhibit 5.6: Share of countries in world wool production (2008P): Greasy Others 32% Australia 21% India 2% South Africa 2% China 19% Uruguay 2% UK 3% Argentina 3% CIS 8% New Zealand 10% Source: IWTO 5. on the back of a healthy 11.8% during this period.10 million tonnes in 1990 to 0. New Zealand’s share has more or less remained unchanged at 10-11% since the mid-90s. 334 .1. production of wool in Australia has continuously fallen – from 1.4. This decline in production can be attributed to fall in wool production in Australia.1. please refer to Annexure – 5. For Note on clean wool production. on the other hand. During the last two decades (1990-2008).A. – International Scenario.4% to 20. expanded its share in world wool production (greasy) from 17% in 2007 to 19% in 2008.4% growth in wool production. China. As a result.1.43 million tonnes by 2008. Australia’s share in world wool production has shrunk from 32.

433 45.3 -5. Belgium. witnessed decline in imports of 51.697 42.1.8%. Italy is the largest importer of wool tops.3%) during 2008.143 Change (%) -16.7: Global trade (2008*) in wool & woollen products Imports Products Volume (Tonnes) 144.8%.1.5.821 94.5% and 40. All the product categories recorded lower imports as also lower exports in 2008.699 39. wool woven carpets and wool tufted carpets.340 tonnes. the world’s leading importer of wool knotted carpets. Steep fall in exports of woollen products 5.9 -33.140 Change (%) -15. over 2007.6.3 Exports Volume (Tonnes) 156.638 54. which is the largest importer of wool woollen yarn. respectively.1. In 2008. 28. The global financial crisis has resulted in sharp decline in imports of woollen products among countries during 2008.GLOBAL TRADE Imports decline in 2008 5.611 42.6 -4. The steepest declines in exports were recorded in wool worsted yarn (-15. posted a 10. Source: IWTO 5. Exhibit 5.5 -15.7.9 -30.7 -5 -6.355 87.3 Wool tops Wool worsted yarn Wool woollen yarn Wool knotted carpets Wool woven carpets Wool tufted carpets *Provisional. imports of wool tops by Italy declined by 18.7 -21.1. the largest importer of wool worsted yarn.9% decline in imports to 18. China.8% decline in imports during 2008. Exports of various woollen products recorded declines in 2008.7 -14.480 75. USA.867 47.3% to 25. recorded 12. Globally.654 tonnes during 2008. 335 .718 68.7%) and wool tufted carpets (-11.7 -11.

Turkey. India. & 5. UAE India. UK.8: Global trading partners in wool & woollen products Products Wool tops Wool worsted yarn Wool woollen yarn Wool knotted carpets Wool woven carpets Wool tufted carpets Source: IWTO Major importers Italy. Belgium. Belgium. China. USA USA. Italy. UK. Afghanistan. Hong Kong. Canada Major exporters China. please refer to Annexures – 5. Lithuania India. Germany. Germany. 336 . Czech Republic. Germany. Australia. Netherlands For detailed note on Global Trade. Czech Republic. Germany. Russian Federation USA. Turkey USA.1. Hong Kong. Germany. and Country Study.Exhibit 5.2.3.A. UK. Denmark. UK. Germany.A. Australia. China. Poland New Zealand. Japan Belgium. Italy. China. Germany China. Belgium. Nepal China. New Zealand. Uruguay. Honk Kong. Iran. Pakistan. Hong Kong. UAE. South Korea China. Argentina.

5.1: Production of fibres in India Raw wool 0. Punjab alone accounts for 40% of the woollen units. However. 5. India ranks among the leading five countries in the world in sheep population.2. Exhibit 5. while Haryana accounts for 27%. Uttaranchal. Punjab.2. – Indian Scenario). Uttar Pradesh. There are around 958 woollen units in the country. Further. in India the average is 0. Gujarat. Rajasthan 10% and the rest of the states account for the remaining 32%.4. The main wool producing states of India are Rajasthan.1. raw wool accounts for a marginal share of 0.2 lakh weavers in the carpet sector. the total employment is about 27 lakh people. Karnataka. Andhra Pradesh. In line with the trend in world production of different fibres.2.8 kg/sheep/year. 337 .2. with a population of over 60 million sheep. The industry provides employment in the organised wool sector to about 12 lakh persons. of the various fibres produced.2.7% Raw silk 0. please refer to Exhibit 5.3. Maharashtra and Haryana. in India also.A.A.4% Source: www. WOOL & WOOLLEN PRODUCTS: INDIAN SCENARIO INTRODUCTION 5. (For installed capacity details of the industry.com 5.31 in Annexure – 5. while the world average for wool productivity has been about 2.txcindia. majority of which are in the small scale sector.4 kg/sheep/year.8% to total world production. India is the seventh largest producer of wool and contributes 1. In all. Jammu & Kashmir.7% in total fibre production.7% Raw cotton 80.2. there are 3. with an additional 12 lakh persons associated in the sheep rearing and farming sector.3% MMF 18.

6. Globally. Nali.Marginal growth in sheep population 5. Sheep rearing mainly rests with the weaker sections of the society. Moreover. Magra Chokla (Bikaneri).000. Illiteracy and lack of awareness prevents the shepherds form adopting improved sheep husbandry practices. These include Chokla. Exhibit 5. There are 2.4. or their land holdings are so small that crop cultivation does not provide remunerative employment throughout the year. world sheep population has fallen to 1. which either do not possess the land. though by a marginal 1%. 5. to the same level as in 1995.2. There are different varieties of wool producing sheep grown in the country. grazing and stock watering resources are available only for a few months during the year.2: Sheep population (Million) 65 64.99 63 62 61 60 2005 2007 2008P P-Provisional. highland sheep (highland wool).27 64 62.2. etc. every year. 338 . 5. In India. such as the Angora rabbit (mohair).84 64. Mohair comes from Angora goats.08 billion in 2008. Moreover. Migration and grazing practices have an impact on the current state of sheep husbandry in the country.7. Pashmina goat (cashmere/pashmina).2. forcing the shepherds to lead a nomadic life. Marwari. Angora population in the country is around 50.2. particularly in the North-western districts of Rajasthan. This explains the poor growth in sheep population in the country. except in India where it has gone up. in the major sheep rearing areas. thereby adversely affecting the quality as also the quantity of wool produced. around 35% of the sheep population is slaughtered for meat purposes. sheep are traditionally reared for production of wool and mutton. there are several other speciality fibre producing animals that are reared. Pashmina is produced by Changra (Pashmina) goat in Ladakh and Chegu breed of goat in the eastern parts of Himalayas in India.2. Malpura.5. Apart from these wool producing varieties of sheep. There is a decline of about 10% in sheep population in all major sheep growing countries. Source: Wool Research Association 5. etc. Jaisalmeri. Magra.45 lakh Pashmina goats in Ladakh.

2 140 120 41.256 5.Exhibit 5.txcindia.779 61. Demand for wool outstrips domestic production. India imports substantial amount of raw wool for this purpose.com.Indian Scenario.A.376 10. which includes domestic production and imports. 5.1 69.3% in consumption during 2008-09.2.8. garments.3 114.5 133.469 Share (%) 34.32 in Annexure 5.054 7.593 3. please refer to Exhibit 5. around 85% is carpet grade. Bulk of the wool produced in India is of coarse quality and used mainly in the manufacture of hand-knitted carpets.4. Of the total domestic production of wool. knitwear.9.5 22.5 160 Consumption (Mn kg) 48. Exhibit 5.4 11.4: Wool production & consumption trend Production (Mn Kg) 50. Wool – Domestic production & consumption 5.3: State-wise sheep population (2003) States Andhra Pradesh Rajasthan Karnataka Tamil Nadu Jammu & Kashmir Others Total Source: Ministry of textiles Population ('000 nos) 21. Consumption.8 9.8 16.5%.2. finished textiles.411 13. Decline of 17. while domestic production grew by 7. blankets. recorded a CAGR of 3% during the period between 199192 and 2008-09. The rest are being used for the manufacture of apparel. 10% is coarse grade and the balance 5% is apparel grade.2. Department of Animal Husbandry. etc. www. DGCI&S 339 .6 100 80 60 40 20 0 Note: Domestic consumption = Production + Imports Source: Ministry of Agriculture.A. reflects the steep decline in imports during the year. since India produces a lot of value added products that are exported.4 For a detailed list of state-wise sheep population.2.1 5.

Magra.6: Sheep variety & micron structure Sheep breed Hissardale crossbred wool. Shahabadi. indigenous wool production recorded a compounded annual growth rate (CAGR) of a negative 0. production of indigenous wool recorded growth of less than 1% during the period between 2005-06 and 2007-08. Pugal Malpura. Hassan Mirzapur. During 2008-09. Deccani Nellore.5 million kg.5. Jaisalmeri. After declining by 4% in 2003-04 and by 8% in 2004-05. Gaddi Marwari. Kashmir Valley wool. production grew by 7. Jalauni.5: Varieties of sheep and quality of wool produced by them Sheep variety Chokla Magra Chokla (Bikaneri) Magra Nali Jaisalmeri Marwari (Washed) Marwari (Greasy) Malpura Source: Industry Quality 28-32 microns 32-36 microns 32-36 microns 32-36 microns 32-36 microns 36-40 microns 36-40 microns 36-40 microns Colour White/Yellow White/Yellow White/Yellow White/Yellow White/Yellow White/Yellow White/Yellow White/Yellow Exhibit 5. Patanwadi.10. Rampur Bushir. In fact. Sonadi.5% at 48.4% during the period between 1998-99 and 2007-08. Wool quality & sheep variety Exhibit 5. Kashmir Valley-Russian Merino crossbred wool Chokla.2.2. Nali. Ramnad Source: Wool Research Association Category Micron structure (Average diameter) below 28 microns between 28 and 34 microns between 34 and 40 microns between 40 and 50 microns between 50 and 80 microns 80 microns and above Fine Wools Medium Wools Coarse Medium wools Coarse Wools Very coarse wools Hairy Types 340 .2.

etc. These include the fibre obtained from the Angora rabbit and Pashmina goat. Infant Apparel Interior trimmings. Quilts. Uniforms. Kidmohair fibre is fine with micron range of 10-40 microns. Machine washable suits.2.13. among others. and Maharashtra produce wool. Hats. sports. Socks & Gloves. Wool Filters for Dust/Chemical Odours. Upholstery. Pressure Bandages. Specialty fibre 5. aviation.11. Medical Sheepskins. Toxic Chemical Filter Sheepskin boots & garments.000 kg of specialty fibre is produced annually from the Angora rabbit. and that of the Malra is below 15 micron. Certain southern states of the country such as Andhra Pradesh. Aircraft Interiors. There are certain finer varieties of specialty fibre that is produced in small quantities in the country. Milinery. Sound & Vibration Control. The fineness of the Cashmere/Pashmina fibre ranges from 15-17 micron with 32 to 50 mm length. Woven garments 341 Architecture Protective Apparel Aviation Protection In Industry Apparel . Pullovers.Deccani wool 5. Bandages Root Insulation. Interior Sound Proofing Air Conditioning. and is used for manufacturing low-quality blankets. Firefighters Uniforms. Waterproof Garments. Use of such type of wool should be encouraged for manufacture of certain industrial products such as felts. Wound Dressings. and the fibre length is 100 to 150 mm. Heat Exchangers.2. The average fibre diameter of Changra is 13-16 micron. Various usages of wool 5. Non-Woven garments. Fashion Garments. Karnataka. Children’s Nightwear. which is coarse and brittle in nature. architecture. Drapes. Flannels. Wall Coverings. Approximately 30. Tamil Nadu. Carpets Police Uniforms. It can be used in different sectors including medical.2. This type of fibre is apparel grade and come with below 28 micron. Thermal underwear. Blankets. Pashmina production is about 32 metric tonnes from the traditional areas and about 5 metric tonnes from some pockets of non-traditional areas. Such type of wool is generally black in colour and has average thickness of 32 micron. Flight Attendant Apparel. Accessories. Military Uniforms. This type of wool has limited usage. There are various usages of wool.7: Usage of Wool Sectors Medical Usage Second Skin Injury Prevention.2.12. Exhibit 5. filter materials. Electrostatic Filters.

which cannot be achieved easily with fabrics made from a single fibre type. Air/Dust Filters. Linen 342 . The synthetic fibre industry is dominated by polyester. Gaskets & Washers. Thermal underwear.2. which is then blended with other fibres for manufacturing woollen and worsted fabrics. Polyester b. Molecular Templating. Inherenity conductive polymers Ski Wear. Some of the fibres which are blended with wool include: a. Viscose c. Sheepskin Seat Covers BLENDING OF SYNTHETIC FIBRE WITH WOOL 5. Lycra f. Various man-made fibres are blended with wool. In fact. Sportwool Clothing Manufacturing Piano Felts. 5. which was once used only for winter clothing. nylon. Wool filters for dust / Chemical Odours. Acrylic e.15. Bamboo d. largely from Australia (Merino wool). and acrylic fibres with polyester being the dominant fibre. Absorbs Toxic Metals. Buffering Pads.2. cellulosic fibre such as viscose and rayon. Olympic Uniform. in blending with cotton and other natural and man-made fibres. Blending refers to the sequence of processes required to convert two or more kinds of staple fibres into a single yarn composed of a mixture of the component fibres.2.7: Usage of Wool Sectors Smart Textiles Sports Usage Vital signs vest.2. which can be worn throughout the year. Waterproof Fabrics. Baseball Filling. apparel wool.Exhibit 5. Fibres are blended to acquire fabrics with enhanced or unique properties. Billiard Cloths. 5. Baby Blankets. India imports apparel grade wool. over the years. Blended fabrics are more preferred as they offer better styling (good fall and drapes) at a cheaper price. is finding new use across the world. Intelligent Knee sleeve.16. Pure wool is not always the most preferred among consumers and therefore among manufacturers.14.

5 10 0.5 8 0. This can be attributed to: 8. Silk Wool blended with synthetic fibres is gaining popularity among consumers. More suitable in temperature climate 11.5 11 13 8 0.18. while keep the look of wool intact. Source: Indian Woollen Mills Federation 343 .5 5. During 2008-09.2.g.6 -4.9 4. nylon or polyester blended with wool provides strength and resistance to abrasion.2.5 200607 58 35 35 80 37 28 16 17.5 200405 46 34 30 70 27 20 12 14. production of woollen yarn and hand-made carpets is estimated to have posted a decline over 2007-08.4 7. shoddy fabrics and knitted goods is estimated to have recorded growth over production in the preceding year. fabrics (woollen/worsted).g. Lower in price than pure woollen clothing 9.2. blankets (shoddy/woollen). Tencel h.7 5. shoddy yarn.2 9.17.8: Production of woollen textiles Items Worsted yarn Woollen yarn Wool tops Fabrics (Woollen/worsted) Shoddy yarn Shoddy fabrics Blankets (shoddy/woollen) Knitted goods Handmade carpets Machine-made carpets Unit Mn kg Mn kg Mn kg Mn mtr Mn kg Mn mtr Mn pieces Mn kg Mn sq mtr Mn sq mtr 200304 44 34 28 66 25 17.4 200809E 60 30 37 85 40 30 18 19 10 0.4 10. Modal i. Blended products have better durability.4 -2. 5.5 200708E 58 35 35 81 38 29 17 18 12 0.9 11. Exhibit 5. E. wool tops. production of worsted yarn. On the other hand.4 E-Estimated .4 CAGR (%) 6.5 200506 53 34 33 75 32 24 14 16 9 0. Production trend analysis – Woollen textiles 5. Ease in handling and maintenance 10.

FOREIGN TRADE
5.2.19.

In order to meet the gap between domestic production of wool and the demand, the country depends on imports. Australia, New Zealand, Pakistan, China etc are the major countries from which India meets its import requirements for raw wool. The country reported lower imports on a year-on-year basis during the recent two years (2007-08 and 2008-09). On the export front, UK, Italy, USA, Dominican Republic and UAE are the major countries for India’s exports of woollen yarn, fabrics and made-ups, while USA, UAE, UK, Germany and France are the leading markets for India’s exports of readymade wool garments.

Wool imports fall in 2008-09
5.2.20.

India imports raw wool to the tune of around 65.7 million kg (2008-09). During 2008-09, there was a decline in imports. In volume terms, raw wool imports declined by 33.5%, while in value terms they decreased by 5.2% during 2008-09. Exhibit 5.2.9: Import of raw wool Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Source: DGCI&S

Volume (Tonnes) 73,659 84,612 84,753 90,185 99,617 92,904 65,653

Value (Rs crore) 801.8 870.6 867 903 1,078.10 1,088.40 1,031.90

5.2.21.

Since the production of fine apparel grade wool is not adequate in the country, a large quantity of wool is imported from Australia, New Zealand, China, Middle East and other countries. Australia alone accounts for 27.3% of India’s total raw wool requirements (2008-09), while around 13% of India’s raw wool requirements are sourced from New Zealand.

5.2.22.

During the last five years or so, there has been a change in share of countries from which India sources its raw wool requirements. In the last few years, New Zealand has replaced China as the second largest sourcing destination for India’s raw wool imports. While New Zealand’s share in India’s

344

raw imports (in volume terms) has increased from around 11.4% in 2004-05 to 13.3% by 2008-09, that of China has fallen sharply from 18.9% to a mere 2.9% during the same period. Exhibit 5.2.10: Change in direction of India’s raw wool imports 2004-05
UK 3.5% Italy 6.5% Pakistan 1.5% Syria 1.5% Australia 19.8%
UK 4.6% Australia 27.3% Turkey 3.8%

2008-09
China 2.9%

Syria 4.7%

Turkey 8.3%
Italy 5.5%

New Zealand 11.4%

China 18.9%

Pakistan 6.2% New Zealand 13.3%

Source: DGCI&S
5.2.23.

There has been a shift from imports of fine wool quality to low quality wool in the recent years. This is on account of consumer preference for hand tufted carpets in the US and other western markets. Cheap wool imports from the Middle East are constantly growing and mainly go into hand tufted carpets mixed with indigenous wool. Exhibit 5.2.11: Raw wool imports (In tonnes) Countries Australia New Zealand Pakistan Italy Syria World
Source: DGCI&S

2002-03 20937 11169 1094 5949 1770 73659

2003-04 16141 7893 2459 6891 1567 84612

2004-05 16790 9652 1270 5491 1236 84753

2005-06 19007 10535 2721 5625 1595 90185

2006-07 20937 12907 4716 6337 3313 99617

2007-08 18621 12179 6061 5422 4440 92904

2008-09 17908 8712 4045 3579 3103 65653

Share (%) 27.3 13.3 6.2 5.5 4.7

345

Exports fall in 2008-09
5.2.24.

Overall exports of wool and wool blended products are estimated to have declined by 8.4% to around Rs 5,064.3 crore during 2008-09. This largely reflects the 23.2% drop in exports of carpets, rugs and druggets. Exhibit 5.2.12: Exports of wool & wool blended products (Rs crore) Products Fabrics Yarn woollen/worsted/shoddy Blankets Wool tops Shawls/scarves/stoles and mufflers Hair belting Carpets, Rugs, Druggets Including Namdhas Knitwear Machine made carpets Total
*Estimated; Source: Industry

2006-07 433.23 474 77.76 154.08 578.88 12.24 3674.86 345.18 1.44 5751.67

2007-08* 368.24 426 58.32 154.08 619.4 10.4 3524.73 363.57 1.44 5526.78

2008-09* 442 512 70 185 681 12.48 2708.73 451.68 1.44 5,064.30

Exhibit 5.2.13: Import duties on wool & other fibres used by woollen/worsted textile industry (%) Item Wool not carded or combed Fine or coarse animal hair (Cashmere, Angora, Rabbit hair, Mohair, etc) Waste of wool, including yarn waste, noils of wool but excluding garneted stocks Basic duty 5 CVD Ad. Val. Nil Education Cess @ 3% 0.15 Special Addl. CVD @ 4% Nil Total Duty Ad. Val. 5.15

5

Nil

0.15

4.20

9.35

10

Nil

0.3

4.41

14.71

346

41 9.16 *8.16 *8.4 *8. 12% and 8% applicable to non-petroleum products have been reduced by 4% each.4 18. 347 .2 Total Duty Ad. CVD @ 4% 4. please refer to Annexure – 5.4 18. PTA. the optional CENVAT on Pure cotton textiles restored at 4% and for other textile excluding Man-made filament yarns and fibres at 8%.24 8.5. 8% and 4% respectively and CENVAT on cotton textiles and textile articles has been reduced from 4% to Nil as a measure to stimulate the economy in the context of global economic recession by Government of India on 7th December 2008. i.16 *8.24/*4. Nil 8.16 *8.78 4.2.24 8.78 4.e. The mandatory CENVAT on Man made filament yarn & fibres and textile intermediates like DMT..24 #* 8.24/*4.15 Special Addl. # The three major ad valorem rates of CENVAT-14%.12 Note: * Zero duty without CENVAT facility.16 * 8.24 #* 8.57 0.14: Excise Duty Structure Items 200102 200203 200304 200405 200506 Wool Wool Nil Nil Nil Nil Yarn Woollen Yarn 16 12 10 *8.24/*4.24/*4. in Budget 2009-10. to 10%.A.12 Nil Nil Nil Nil Nil 200607 200708 2008-09 2009-10 Fabrics Woollen Fabrics 18.1 24.2. acrylonitrite etc.12 #* 8.24 Nil Education Cess @ 3% 0. 9.13: Import duties on wool & other fibres used by woollen/worsted textile industry (%) Item Woollen & synthetic rags Wool tops – All microns Polypropylene staple fibre Nylon staple fibre Flax fibre Basic duty 5 20 10 10 5 CVD Ad.2 4.12 #* 8.35 Note: Flax fibre is a natural fibre & is a basic input for manufacture of flax/linen products Source: Industry Exhibit 5. Source: Website of Office of the Textile Commissioner For more statistics on Foreign Trade.Exhibit 5. However. Val.41 24.16 * 8.57 0. Val.35 35.15 Nil 0.20 5. have been increased from 4% to 8%.

Tamil Nadu. On account of the low quality of products manufactured. which account for about 85% of exports from this region. However. sweaters. brokers. Shoddy industry 5. The Indian hand-knotted carpet industry is essentially a cottage industry in the unorganised sector. As a result. durries. the Mirzapur-Bhadohi-Varanasi carpet belt accounts for close to 80%. Of the total carpet exports from India. It is a rural-based. and exporters. cotton. has resulted in sharp decline in exports.2. 5.26. Haryana.INDUSTRY SUB-SEGMENTS Carpet industry 5. woven and tufted types.29. The industry is not qualityconscious and mostly produces low-end products which are mostly sold in the domestic market as well as exported to poorer countries of Africa and Middle East.25. world buyers of high quality carded wool fabrics and blankets have shied away from sourcing their requirements from India.2. Uttar Pradesh. weaving or processing.2. It is popular in the states of Jammu & Kashmir. providing employment to wool growers. half of the units are out of business. cotton.28. The major export items include carpets made from wool. US is the largest export market for carpet made in India. rugs and druggets. India exports all the three varieties of carpets – hand-made.5 million people in the backward and rural areas of the country. slowdown in export demand from the US and Europe.2. 348 . It provides employment to around 2. mats and mattings. There are about 500 units engaged in the production of shoddy woollen products by way of spinning. jute and coir.27. manufacturers. The shoddy industry in India is a major contributor to India’s exports from the woollen sector. the Finance Minister has made announcement of setting up a mega carpet cluster in this belt. machine-made and silk carpets. Handmade carpets (knotted) account for a lion’s share of 75% of the total carpet exports from India.2. accounting for more than half of India’s export earnings. Tamil Nadu and Sikkim. The shoddy industry contributes nearly 30% to the woollen industry’s turnover. blazer fabrics and heavy woollen jacketing materials. labour-intensive and export-oriented sector. Indian carpets can broadly be classified into knotted. in the recent years. traders. Himachal Pradesh. silk. Carpets can be handmade or machine-made. In order to help the industry in this region in the long run. It is an employment-oriented sector. Punjab. 5. 5. The reclaimed textile fibre is spun on the woollen system to make yarns suitable for making blankets.

there is strong demand for high-quality blankets and fabrics made from shoddy fibres. Currently shoddy units are not allowed to be set up in SEZs/EOUs. Amritsar and Ludhiana in Punjab are the major shawl and scarf manufacturing centres in India. and to the tune of Rs 450-500 crore for man-made and viscose shawls and scarves recorded during 2008-09. Europe. Thus. Prices of other inputs such as acrylic. The industry is using old/outdated machinery and technology in the processing segment.31. Australia.30. and with Australia suffering from drought since the last 3 years.2. viscose yarn. etc are the major export destinations for shawls and scarves manufactured in India.33. This results in inadequate quality of finished products. the shoddy industry in Europe is shifting to Dubai. 5. Karachi.2. China and South America. India is losing the opportunity of attracting this shift from Europe.2. It is a substantial foreign exchange generating segment. The Indian shawl and scarf manufacturing industry is facing high raw material cost pressure. with exports to the tune of Rs 400 crore for woollen shawls and scarves. while on the one hand. Globally. polyester. and this demand is currently being catered to mainly by Italian and other European companies. and is also facing severe competition from China. etc. and India could very well take advantage of this by focusing its efforts on quality improvement. however. The origin of the shawl industry in India dates back to 1833.2.32. There exists a huge gap between global demand and supply. prices of Merino wool have risen sharply. have also witnessed sharp increases in the recent past. the industry is fighting increased cost pressures. 5. On account of rising cost of labour. It is dependent upon import of Merino wool from Australia.5. Lifting of this ban is expected to attract greater investments into this industry and improve the prospects of this industry as several foreign manufacturers would be interested in setting up their plants in India on account of the cheap labour availability. The US. 349 . Canada. when a large number of famine-stricken Kashmiri weavers came and settled in Amritsar. on the other hand it is facing weakening in export demand on account of the global slowdown. Presently. Shawl & scarf industry 5.

In the next one decade. MMF production to grow by 9.5-10% in the next decade B. Man-made fibre consumption to grow by 9. During the period between 2009-10 and 2014-15.8 million kg by 2019-20. raw wool consumption is expected to grow at a CAGR of 7.3.3. Exports a.1. This growth rate is estimated to be maintained during the period between 2015-16 and 2019-20 as well. World GDP to grow by 4% b. INDUSTRY OUTLOOK 5. World GDP to grow by 4% b.5-10% in the next decade d. For the purpose of forecasting.5% c. Sheep meat price to grow by 6% in the next decade c. consumption (production + imports) of raw wool is estimated to double.5. Source: D&B India 350 .1: Raw wool consumption* (Million kg) 300 250 200 150 100 50 0 1990-91 1999-00 2008-09 2010-11 2014-15 2019-20 *Production + Imports.8%. Domestic Production a. Per capita income of India to grow by 6. World GDP to grow by 4% C. D&B India has made the following assumptions: A.3. from 114. Exhibit 5.2.2 million kg in 2008-09 to 260. Consumption a.3. Sheep population to grow at the rate of 1% CONSUMPTION 5.

3.9 Readymade Garments Wool 19.3.6 13.3. D&B India expects exports of woollen products to continue with their strong growth.2: Growth of exports of woollen products (%) Period FY10 .FY15 FY16 . while during the period between 2015-16 and 2019-20.1 21. the exports of readymade wool garments would post a CAGR of 19. domestic production is estimated to grow at a CAGR of 1%.4. exports of woollen yarn.5% during the period between 2015-16 and 2019-20. This growth rate is estimated to be maintained for the period between 2015-16 and 2019-20 also.9%. we expect production to increase to 54.3.6%. Exhibit 5.FY20 Source: D&B India Woollen yarn.3. The growth momentum is expected to accelerate during the following five years. Exhibit 5. and exports are projected to record CAGR of 21. fabrics and made-ups are expected to record a CAGR of 11.3: Raw wool production (Million kg) 60 50 40 30 20 10 0 1990-91 1999-00 2008-09 2010-11 2014-15 2019-20 Source: D&B India 351 . From a level of 48.5 Raw wool Domestic production 5. During the period between 2009-10 and 2014-15. During the period between 2009-10 and 2014-15. fabrics. D&B India estimates domestic production of raw wool to grow at marginal rate going forward. madeups etc 11.1% during 2009-10 to 2014-15. exports are likely to post higher CAGR of 13.1 million kg by 201920. As per our estimates.5 million kg during 2008-09.EXPORTS 5.

Exhibit 5. they are expected to increase to 206.7%. they are estimated to grow at a CAGR of 10.Imports 5.7 million kg by 2019-20. and for the period between 2015-16 and 2019-20.7 million kg in 2008-09.3. imports are estimated to grow at a CAGR of 11. From a level of 65. imports of raw wool are expected to increase significantly going forward. During the period between 2009-10 and 2014-15. As per the estimates of D&B India.1%.3.4: Raw wool imports (Million kg) 250 200 150 100 50 0 1990-91 1999-00 2008-09 2010-11 2014-15 2019-20 Source: D&B India 352 .5.

both from the domestic and international perspective. In this section. Presence of long chain of intermediaries IMPORT DUTY STRUCTURE 5.4. In the previous two sections. we have dealt with the details about the industry dynamics. ISSUES AND CONCERNS OF INDIAN WOOL INDUSTRY 5. 1. India ranks among the top 10 wool producing countries in the world.4. including yarn waste.30 0. 5.35 35. we attempt to highlight the three key concerns related to the wool fibre. South Africa.2. The domestic industry is highly dependent upon imports of apparel grade wool as apparel grade of wool of fine micron (24 micron and finer) and other finer animal hair are not indigenously available. Nil Nil Education cess 0. The quality of locally produced wool is also a matter of concern. 4. Rabbit hair. etc. Availability of wool in desired quality and quantity 3.24 0. etc) Waste of wool. Val 5.20 14. However. This makes the domestic industry dependent on imports from Australia.4.35 3. 10 5 20 Nil Nil 8.15 Special addl. there exists huge gap between demand and domestic production. Uruguay. No.15 9.20 Total duty Ad. 1.5.15 0.1: Current structure of import duties on raw materials (%) Sr. The current import duty structure is depicted in the table below: Exhibit 5.10 353 .20 5. Import duty structure 2. mohair. noils of wool but excluding garneted stocks Woollen & synthetic rags Wool tops – All microns Basic duty 5 5 CVD Ad Val. 2. Angora.15 Nil 4. Item Description Wool not carded or combed Fine or coarse animal hair (Cashmere.1.71 9.4. CVD @ 4% Nil 4. New Zealand.41 4.

5. of 2. CVD @ 4% 4. are in turn used as raw material for shoddy industry in the small and medium size sector. used in blending with wool to produce yarn required by carpet weaving industry and for weaving of apparel fabrics. Although India is among the top 10 producers of wool in the world. The industry is unable to improve its cost-competitiveness on account of the high duties. Of the total wool produced in India. 7. Also. Val 24.57 0. The country imports wool from New Zealand to be used for blending with indigenous wool for the carpet sector. 8. woollen and synthetic rags attract duty of 9. it is important to rationalise import duty on such machinery.5. Wool yield in India is low – avg.1: Current structure of import duties on raw materials (%) Sr.5 kg).6. 8.4.41 24. which attract even higher duty rates of 24. 5.24 8. The industry is dependent upon imports for its raw material requirements. While wool waste attracts import duty of 14.4.Exhibit 5.24 Nil 16. There are certain other raw materials such as polypropylene and nylon staple fibres.78 4. No.91 Total duty Ad.41 9.7%.3.4. Item Description Polypropylene staple fibre Nylon staple fibre Flax fibre Specified machinery & garment machinery (incl.07 Source: Industry 5.66 Special addl. 6.35 27.78 4. against a world avg. 0. Small and medium scale units engaged in the production of low cost woollen fabrics and blankets are dependent on wool waste.3%. woollen and synthetic rags for their raw material requirements (for regeneration into spinable fibre).48 Education cess 0.4. 9. AVAILABILITY OF WOOL IN DESIRED QUANTITY AND QUALITY Carpet grade wool 5. The woollen and synthetic rags that are regenerated into spinable fibres.41%. domestic production is not sufficient to meet the entire requirements of the industry (both for domestic and exports).0 CVD Ad Val.0 5. Hence.15 0. Appropriate rationalisation of duties will enable the industry to improve its overall cost-competitiveness. machinery required for the woollen industry is not manufactured domestically.20 4.57 0.4. 354 .4 kg per sheep/ year (Australia: 4.9 kg per sheep/ year. around 85% is carpet grade wool.4. woollen machinery) Basic duty 10 10 5. to encourage upgradation in the industry.

This has also led to dilution in quality and lower yield of wool per sheep. and lack of education/training/awareness of the sheep rearers on disease management and necessary nutrition care and feeding management practices.4. Between 2004-05 and 2007-08.5% to 48. 355 . such as goats. This results in limited usage of this type of wool. focus is on meat production. and Maharashtra is coarse and brittle in nature. thereby reducing the availability of sheep for wool purpose. The low quantity of locally produced wool can be attributed to: a. such type of wool is generally black in colour and has a micron structure of 32. Rising preference among sheep growers for heavier sheep for mutton purpose. thus making sheep rearing for meat purpose more attractive.4. f. the wool and woollen products industry continues to depend on imported wool. production recorded a growth of 7. that has less fleece on it and hence. High sheep mortality.8.1% during 2003-2008. During 2008-09.5 million kg. This is due to inadequate veterinary and healthcare facilities for sheep population. Karnataka. Also. In the absence of sufficient domestic production. Shepherds get only 15% of their total earnings from sale of wool. Thus. which contributes nearly 75% to their total earnings. Production of indigenous wool recorded a CAGR of -0.7. machine shearing of sheep etc due to lack of education and poor economic condition of the wool growers. there is dilution of carpet grade wool producing sheep by inter-mixing with mutton producing animals. Lack of motivation for adopting modern methods of sheep management. d. Wool growers receive non-remunerative prices for their wool. inadequate cross-breeding and selective-breeding practices. c. it is generally used for manufacturing low-quality blankets. The kind of wool produced in certain southern states such as Andhra Pradesh.9. Tamil Nadu. Domestic production of raw wool has declined since the production levels in the late 1990s.Deccani wool 5. e. and the dependency on imports continues to increase.4. with an average annual mortality rate of 12-15%. production remained stagnant at around 45 million kg. contributes much less to the overall wool production. Secondly. b. Slow growth in sheep population that had grown at a CAGR of 1. Inadequate quantity of domestic wool 5.4% during 1998-99 to 2007-08. Lack of development of high wool yielding sheep breeds. and lack of shearing facilities. 5.

Thus. Apparel grade wool has a marginal share of 5% of annual wool production in India.11. spinning. which affects the quality of the produce. particularly for export purpose. scouring.4. Moreover. although is labour-intensive and requires lower capital investment. carding.4. which affects the quality of the raw material as also the finished product. Apparel grade wool 5.4.4. The system of grading is virtually absent at the sheep breeders’ level. Angora. Domestically produced wool is coarse and brittle in nature. and impacts better price realisation for the wool growers. Pashmina. 5.4. Use of traditional shearing practices (hand shearing) affects the length and quality of fibre.14. b. Inadequate testing facilities and quality control measures. The dependence on imports makes the sector vulnerable to the vagaries of movement in international wool prices and fluctuating exchange rates. As a result. The decentralised sector. deburring. The low quality of wool can be attributed to: a. particularly in the organised sector.Inadequate quality of domestic wool 5. carbonizing.g. there exists inadequate and outdated processing facilities for growers of specialty fibres (e. The handloom industry uses crude form of carding which results in low productivity. d. particularly in the medium and small-scale level. The processing and finishing of wool products is a weak link which requires huge capital investment. While domestic availability of wool remains a matter of concern. the country is almost entirely dependent on Australia for importing Merino wool for apparel making. 5. etc. as traditional method and equipments are still used in the sector. Inadequate processing facilities (both pre-loom and post-loom) such as scouring. Wool processing facilities such as carbonising.12. carding etc are not adequately available to the wool growers and wool users. handloom weaving and finishing. this affects the quality of the finished product c.13. lack of proper pre-loom and post356 . deburring. with an average thickness of about 36 microns. etc). the quality of wool is also not up to the requirements of the Indian wool and woollen products industry. Domestic production of wool is almost entirely broader micron wool.10. This makes the wool suitable mainly for the manufacture of carpets. dyeing. uses traditional or outdated technology. rugs and other coarser products (85% of domestic production is of carpet grade wool). The industry also suffers from lack of adequate dyeing facilities. Use of outdated processing technology 5.

marketing of wool is a weak link in the wool industry. In the absence of grading mechanism. Hence. –Issues and Concerns of User Industries.15.4. as they are being exploited on account of the long chain of intermediaries. ultimately affects the quality of the finished products. Currently.17.4. the latter are forced to sell their produce at unremunerative prices/below market price. and are also being exploited by various intermediaries. sometimes running up to as many as 4-5 intermediaries. One of the major problems being faced by the wool growers is that they are unable to fetch higher price for the wool produced. 357 . both in the organised and decentralized sectors. the inadequate quality is also due to absence of grading mechanism at the sheep breeders’ level.loom processing facilities.16.4.A. Because of this reason.6. On account of these private middlemen. 5. there is a need to strengthen the current marketing chain and establish proper procurement policy. Absence of grading mechanism 5. Many a times. This is because wool marketing is mainly in the hands of the private wool merchants and traders. please refer to Annexure – 5. Apart from the various reasons discussed above. PRESENCE OF LONG CHAIN OF INTERMEDIARIES 5. For issues and concerns of user industries. there is lack of encouragement among wool growers to produce better quality wool. shepherds currently earn just Rs 20-25 for per kg of wool. local wool merchants or middlemen purchase wool from wool growers at 5-10% below the market price. who exploit the wool growers. and wool passes through various intermediaries before reaching the consumers.

5.1.FY15 1. POLICY RECOMMENDATIONS FOR THE WOOL INDUSTRY 5.5. domestic and export purposes.1: Forecast of raw wool production & imports (CAGR %) Parameter Domestic production Imports Source: D&B India FY10 . which are required to provide boost towards improving the quantity and quality of wool in India. As discussed earlier. This section focuses on the policy recommendations for the wool industry towards a sustained longterm growth. which mainly includes rationalisation of the import duty structure in wool and woollen products.5. as domestic raw wool production is estimated to grow at a marginal CAGR of 1% during 2009-10 to 2014-15.0 11. and  Non-fiscal measures.0 10. Given the requirements of the Indian wool and woollen products industry for both. and in the process earn valuable foreign exchange for the country and generate sustainable employment too. it is dependent on New Zealand for carpet grade wool. Exhibit 5.2.5.7% during 2009-10 to 2014-15.FY20 1.1 358 .5. This scenario is expected to continue going forward. The policy recommendations for the wool industry can be broadly classified into two categories –  Fiscal measures.7 FY16 . While India is dependent on Australia for its requirements for apparel grade wool. the country is dependent on imports for quality wool to meet domestic as well as export requirements. D&B India estimates imports of wool to increase at a CAGR of 11. Duty rationalisation is looked from the perspective to encourage value addition by the domestic industry by importing quality raw material to export woollen products. FISCAL MEASURES Duty structure rationalisation 5.

fabrics.4.5 Following is the argument for duty rationalisation: 5. which currently attracts a duty of 5%.5% during the same period. there is a need to rationalise import duty on raw wool. and the gap between demand and domestic production will have to be met by imports. This industry mostly employs women folk. Hence. given the export potential and likely growth opportunity (as revealed by future estimates as above).1% during FY10-FY15 and exports of readymade wool garments to grow at a CAGR of 21. and weaving waste.5. The industry mainly depends upon imports for its raw material requirements.5.5. and abolition of import duty on raw wool would result in loss to the exchequer. and on woollen yarn and fabrics. which attract a duty of 10%.5. Rationalisation of import duty on woollen yarn & fabrics and waste of wool to 5% each. Exports of woollen products from India are expected to grow at healthy rates.5. sweaters.3.6. and it is also a major contributor to India’s exports from the woollen sector. The wool waste imported is carding waste. Raw wool & woollen yarn and fabrics The domestic industry will not be able to produce adequate quantity of raw wool.7. Exhibit 5.1 FY16-FY20 13. 5. made-ups etc Readymade wool garments Source: D&B India FY10-FY15 11. import duty on the raw materials should be reduced. Waste of wool The shoddy industry currently imports waste of wool at a basic customs duty of 10%. Exhibit 5. and brought at par with raw wool.2: Export forecast of woollen products (CAGR %) Products/Period Woollen yarn.5.9 21.6 19. spinning waste.3: Duty rationalisation Items Raw wool Woollen yarn & fabrics Waste of wool *Basic customs duty Source: D&B India Current duty rate* (%) 5 10 10 Proposed duty rate* (%) 0 5 5 5. In this respect.5.5. D&B India estimates exports of woollen yarn. It uses wool waste to make yarns suitable for making blankets. blazer fabrics and heavy woollen jacketing materials. the amount of direct loss of revenue can very well be over compensated by the rise in exports 359 . However. 5. combing waste.5. fabrics and made-ups to grow at a CAGR of 19.

The domestic industry has potential in carpet grade wool. 5. Chokla.8. With a view to preserve this breed of sheep and improve upon its number. and this can be attributed to use of highland wool in production of their carpets. focus should be laid on these selective sheep breeds.5.9. 5. 5. India has some of the best carpet grade wool producing sheep breeds such as Magra.12. 5.5. due to increased cost effectiveness translated through lower price in the major export markets of Indian woollen products. and therefore efforts should be concentrated on increasing the production of carpet grade wool to reduce our dependence on imported wool. selective breeding programmes should be implemented.5.5.5. The cross-breeding programmes should be implemented in conjunction with the respective State Animal Husbandry Departments to ensure better synergy and involvement. hills of Uttar Pradesh and 360 . Selective breeding farms should be encouraged to be set up. This should be done through increased thrust on cross-breeding programmes with an aim to bring down the micron structure of the carpet grade wool. in order to achieve the laid objectives.13.11. Thus. efforts should be made for selective breeding and for cross breeding of imported sheep breeds with inferior and widespread local breeds.5. resulting into better returns to the sheep rearers. Moreover. Highland wool 5. There is rising preference for Iranian carpets.of woollen products. This kind of wool can be developed in the hilly tracts of India such as Ladakh. The ‘Bikaneri Chokla’ wool is considered to be the best indigenous carpet grade wool. At the same time. preferably in the private sector or as joint ventures towards improving the production and quality of carpet grade wool. Iran is among the leading exporters of wool knotted carpets in the world. Nalli and Bikaneri. growing export intensive sectors would support employment and livelihood of vulnerable sections of our society. NON-FISCAL MEASURES To improve the quality & quantity of wool Carpet grade wool 5.10. so as to increase the fleece and body weight.

Pashmina. Camps should be organised to educate and train the sheep breeders on the 361 . and adequate healthcare and veterinary facilities. Moreover. The ultimate aim of these programmes should be to upgrade the use of the Deccani wool to make them suitable for use in carpet making.5. This is also because of high mortality rate among sheep.5. Check mortality rate. particularly since they have export potential. Pashmina. Arunachal Pradesh and Himachal Pradesh. which currently is at about 12-15%.16. bring down mortality rate from current 12-15% to 3-5% 5. 5. productivity and sheep management. adequate support should be provided for making available modern processing facilities. we have not been able to increase its production. and obtaining finer variety of the wool (less coarse fibre).19.5. 5. Apparel grade wool 5. To reduce wastage during processing and to improve overall quality. Government should also organise healthcare programmes for better management of sheep at farmers’ level. etc.17. Growers of these specialty fibres should be provided with adequate extension support for marketing to encourage them to take up this activity. an increase in wool yield up to as much as 50% can be achieved. with proper nutritional support. Hence. the government policy should focus on extending proper nutritional support facility. Awareness and training camps should be organised for shepherds for wool improvement.5. 5.5. as against the current practice of using them in making low-value blankets. With proper healthcare facilities. etc.14. This is because of lack of adequate healthcare and veterinary facilities. 5.5.15. etc. Although India has presence in specialty fibre production such as Angora. Domestic production of wool is not sufficient to meet demand. Sikkim. Adequate focus should be laid on implementing long term cross-breeding programmes with an aim of improving the quality of Deccani wool (presently the Deccani wool is generally black in colour). Focus should be laid on exploiting this opportunity and appropriate schemes should be implemented to produce these specialty fibres. Thus it would be important to design time bound result-oriented incentivised schemes for better implementation. Certain regions in the Southern part of India have climatic conditions which are suitable for production of specialty fibre such as Angora.5. Deccani wool 5. it is possible to bring down the mortality rate to as much as 3-5%.20. Earlier research towards wool quality development and the existing schemes have not yielded desired results. Efforts should be focused on implementing programmes for producing highland wool in these regions.West Bengal.18.

with necessary support from the government. etc).26. Some of the international organisations with which India could enter into collaborative research projects include Australian Wool Innovation.23. nutrition support.27.5. since the mortality rate among Indian sheep is high. etc.5. Database building 5. subsidy grants for at least three months during lean period in a year may be considered for supply of nutritious fodder and water. This is especially true in context of the changing fashion trends in the international markets. 5. Collaborative research in development of highland wool in the Himalayan region should be encouraged by the government in collaboration with the industry. Undertake collaborative research projects with leading wool producing countries in the world 5. with an aim to increase both.22. exports and imports. Wools of New Zealand. There is a need to build a national level database on production.5. Reliable and timely data will enable the industry to decide. Exchange programmes should be organised between Indian students and students of foreign design institutes. One-time grant for construction of water storage tanks could be provided in the necessary areas. yield and quality of wool. the research projects should focus on overcoming the diseases in sheep breeds and producing disease-resistant stud rams which are capable of thriving in local conditions.5.24. At the same time. American Wool. In areas where acute water and fodder problems exist. etc. it should also focus on carpet grade wool producing sheep. This will sustain the shepherds to a great extent during the lean period. 5. 5. suitable for apparel making. and imports of raw materials. Also.techniques and advantages of proper rearing practices. the emphasis should be on developing such sheep breeds which can produce finer variety of wool.5. forecast and chalk out necessary plan of action for production programme. South African Merino. 5. Since Indian sheep lack in producing fine quality wool. based on domestic demand as well as exports. 5.25. disease management. as it is a critical aspect. Professors/faculties of foreign design institutions should be invited to teach at Indian design institutes. healthcare measures (vaccination. The industry should undertake collaborative research projects with the major wool producing countries.21. where there is a need to strengthen this link in the Indian industry.5. mainly through successful cross-breeding at ‘live’ conditions rather than at ‘farm’ conditions.5. Foreign collaborations should also be encouraged in designing. 362 . British Wool Marketing Board. Federacion Lanera Argentina. The research should be in the areVas of breed improvement.

30. and would remain vulnerable to the lobbying power of the intermediaries. Awareness programmes should be organised to educate wool growers on the benefits of grading. One-time support could be provided to private players to encourage setting up modern processing facilities. and Social Security Scheme for Sheep Breeders. This will help in creating employment opportunities in the sector. This could include financial assistance to import machinery required for the woollen industry which is not available indigenously.) However. At the same time. in turn.5. but also ensure procuring wool in substantial quality. these schemes/programmes are not fully able to yield the desired objectives. There already exist various schemes under the CWDB such as IWIDP. and the wool processors to command higher prices for their finished products. particularly in the international markets. can procure wool in large quantities from these agencies. aimed at development of the wool and woollen products industry.5.5. Unless this is achieved. A basic measure necessary to improve the quality of domestically produced wool is to make available modern pre-loom and post-loom processing facilities. wool growers would not get desired realisation. better quality will enable the wool growers to fetch better prices for their produce.5. The shawl industry suffers from poor facilities for dyeing and finishing. Quality processing of wool & woollen products.Setting up common facility centres for pre and post loom processing activities 5.31.28. Adequate support should be provided to make available modern dyeing and finishing facilities.5. 5.34. an agency could be set up on PPP model. (The Wool Research Association’s activities are aimed at improving quality of wool through research efforts. the long chain of intermediaries can be eliminated. This should be done in close collaboration with wool producers and the user industry. Strengthening the Central Wool Development Board 5. To ensure remunerative prices to the wool growing community and to encourage more people to grow wool. A restructuring of the CWDB 363 .32. 5. 5. there is a need to review and redefine the role of the CWDB to make it more effective and to enable it to perform the tasks assigned to it appropriately. To incentivise the sheep breeders by way of better wool prices. so that wool growers are not forced to migrate in search of better markets. The role of the agency would be to not only ensure providing wool growers with the right price for their produce. Introduction of grading system & marketing support 5. Such agencies are required to be set up in all the major wool producing centres. The reach of the proposed procurement agency should be such that within a short span of time.5.29.33. scientific grading system should be introduced.5. The spinning mills. Thus. 5.

th To summarise… 5. medium and long term. The table below summarises the various policy recommendations made by D&B India. Deccani wool and specialty fibres 364 . Approach Short term Recommended measures Rationalisation of import duties Support for setting up processing facilities Subsidy grants for supply of nutritious fodder and water Awareness and training camps for sheep breeders Medium term Grading system Marketing support Strengthening CWDB Database building Selective and/or cross-breeding programmes.5. There should be increased allocation of funds to the Board to enable it to achieve its laid objectives in an effective manner. in conjunction with State Animal Husbandry Departments Long term Agency on PPP model for procurement of wool Collaborative research projects Focus on highland wool.36.5. For the 11 Five Year Plan. will help it to implement the various schemes and policies in an effective manner and achieve the desired objectives. the CWDB has undertaken various schemes under fully funded Central Sector Scheme with total financial allocation of Rs 67. 5. The recommendations have been categorised into short. Bangalore.in lines with the Central Silk Board.16 crore.35.

0 10.3 15.5 17.0 85.7 199.1 365 .1 33.A.2 7.9 15.0 14.6 15.1 11.8 13.4 64.7 72.3 52.3 21.5 8.0 23.8 8.5 25.4 24.7 21.1: World sheep population by country (2007) Country China Australia CIS India Iran Sudan New Zealand UK Pakistan Turkey Nigeria Ethiopia Spain South Africa Syria Source: IWTO Population (Mn nos. ANNEXURE 5.0 8.4 1.2 49.) 172.0 Country Algeria Morocco Argentina Brazil Peru Mongolia Somalia Uruguay Afghanistan Greece France Italy Romania Others Total Population (Mn nos. INTERNATIONAL SCENARIO Exhibit 5.A.097.5.0 39.) 19.1.9 26.8 21.A.

343.8 1.1 11.5 154.3 13.8 15.1 1.6 38.1 158.A.1% in 2008.8 4. Production of clean equivalent wool also suffered a decline of 2.1 2.9 38. New Zealand and Argentina reported fall in production in 2008.4 -2.6 213.A.1 5.0 175.5 121. Australia share has fallen to 24% as of 2008.A.6 33.5% to 1.3 175.4 56.9 2007 25.4 126. over 2007.2 496.1 435.3 2005 27. From 33% in 2000.8 36. Over the last two decades.9 193.218.1.7 240.1 401.520.5 1.5 5.1 92.4 13. Among the leading manufacturing countries.5 37. China (2.221.191.5%) and the CIS countries (4%) recorded growth. Exhibit 5.6 9.5 14.0 6.7 96.6 1. while Australia.2 1.7 103.4 5.2 2000 438.6 35.2.2 94.3 14.0 38.3 2000 32. and it has been maintaining this proportion since the early 2000s.19 million tonnes in 2008.1 13.1 2008P 283.0 34.2 2005 332. Australia’s share in world production of clean equivalent wool has been on a decline.5 12.A.3: Share of countries in world wool production: Clean equivalent (%) Countries Australia China New Zealand CIS 1990 36.9 382.7 49. Exhibit 5.2 2007 309.3 71. India has a small 3% share in world production of clean equivalent wool.5 179.0 8.7 396.007.0 1995 472.5 -5.4 7.0 -19. China has been successful in expanding its share from 8% in 1995 to a significant and second largest share of 15.0 1995 31.1 1.1 366 .1 164.0 8.Global wool production Clean equivalent 5.2: World wool production by country: Clean equivalent ('000 tonnes) Countries Australia China New Zealand CIS Argentina India Others Total Source: IWTO 1990 723.3 47.0 14.3 14.5 84.2 230. While New Zealand’s share has remained unchanged at 13% over this period.3 127.2 581.1 8.3 2.6 2008P 23.1 Change (%) -8.1 1.

During 2008. Globally.4 1. while the balance 22% is accounted for by the medium wool (24.5 μ) Medium wool (24.A.343. production of the fine wool recorded the steepest fall.0 32.3. while that of coarse wool declined by 0.2 3.4 267.520. of 42% in total clean equivalent wool production (2008).1 2008P 427.9 262. Production of medium wool declined by 2.6-32.1 Micron is a metric unit of length equal to one millionth of a meter Source: IWTO 367 .2 2000 557.3: Share of countries in world wool production: Clean equivalent (%) Countries Argentina India Others Source: IWTO 1990 4.5 μ).A.A. This is followed by the fine wool (<=24.5 μ) has the largest share.2 2005 465.6-32.7 608.007. Exhibit 5.0 1995 648.4 2008P 3.5 μ).4 276.7 Exhibit 5.8 2.7 1.5 449.3 313.4: Share of countries in world wool production (2008P): Clean equivalent Australia 24% Others 34% India 3% Argentina 3% CIS 8% China 15% New Zealand 13% Source: IWTO 5.7 29.4 2007 3. coarse wool (>32. of 5% to 0.218.7 1.5 μ) Coarse wool (>32.9 3.6 259.9 2.9 502.8 32.3%.2% in this period.4 509.7 2000 2.191.6 1.221. among these three categories of wool.A.Exhibit 5.0 501.2 1.9 1.43 million tonnes.5 μ) Total 1990 948.4 558.0 1995 3. which accounts for 36% of the wool production.7 2.2 2007 450.7 492.9 31.1 2.5: Estimated wool production by micron range: Clean equivalent (‘000 tonnes) Micron range Fine wool (<=24.1 33.2 32.4 2005 4.

USA.5. Imports of wool worsted yarn declined by 14. that of UK remained unchanged at 26%.690 144. Germany.358 18. with the share of 32% of global imports of wool woven carpets in 2008. USA and UK are the largest importers of wool tufted carpets.699 tonnes during this period. only Germany reported increase in imports.5% in 2007 to 29% in 2008.821 tonnes during 2008.6: Imports of wool tops (Tonnes) Countries Italy China Germany Turkey South Korea Others Total Source: IWTO 2001 66.A.A.964 21. etc. the leading importer.7 -17.001 14. USA is also the largest importer of wool woven carpets. over imports in 2007.697 8. In 2008. Exhibit 5.A. The other major importers such as UK.2 -16. UAE.003 20.522 14.789 58.2.7. As a result.A. 5. 5.922 56.3 -7.A.071 13. 5. GLOBAL TRADE Imports decline in 2008 5.600 2003 48.941 2008P 25.749 260.643 12. Globally.602 27.2% in 2008.538 27. Russia.346 tonnes.7% to 144.4 -17. imports of wool tops declined sharply by 16. There was a steep 31% drop in imports of wool knotted carpets in 2008.915 21.444 2007 31.A.746 62.0 -18.473 14.3% to 94.440 11. Among the top five importing countries.340 19.270 173.371 69. During this period.821 Change (%) -18. of a marginal 3. The global financial crisis has resulted in sharp decline in imports of woollen products among countries during 2008.457 17.306 81. with a share of 31% of global imports of wool knotted carpets. recorded a 52% drop in imports during 2008. its import of this product saw a 28.709 184. respectively. also posted double-digit decline in imports.749 19. these two countries reported fall in imports to the extent of 41% and 23%. while USA’s share in total world imports of wool tufted carpets declined from 38.679 12.802 166.3 -18.458 14.860 16.6.5.890 62.208 2005 38.5% decline to 15.7 368 .4.

241 16.045 2008P 14.378 14.648 3.453 16.846 41.007 94.325 1.921 107.326 3.601 13.369 13.2 -5.7 -19.573 39.850 1.988 29.512 2008P 18.8 -33.712 7.110 11.334 2005 24.414 11.3 Exhibit 5.A.446 1.9 Exhibit 5.8 10.385 13.431 10.508 5.4 13.230 6.866 28.9 -18.9 -8.775 20.654 17.9 369 .7 -5.8: Imports of wool woollen yarn (Tonnes) Countries Belgium Hong Kong Australia Denmark USA Others Total Source: IWTO 2001 2.820 128 3.764 2.026 26.025 2005 3.135 133 3.5 27.502 3.7 -25.508 2003 26.313 14.810 127.3 -18.812 2.511 114 4.231 9.920 2008P 9.Exhibit 5.722 14.7: Imports of wool worsted yarn (Tonnes) Countries China Italy Hong Kong Germany Japan Others Total Source: IWTO 2001 31.415 21.255 Change (%) -51.5 -14.742 22.294 2003 32.690 11.734 2003 3.937 15.749 14.557 8.223 2005 31.945 24.461 2007 10.308 103.890 20.485 16.278 89 3.986 16.A.138 2007 21.227 110.510 13.485 1.591 43.356 16.224 1.083 23.492 20.176 18.2 1879.919 37.385 13.727 12.239 7.311 4.562 15.085 2007 29.6 -27.116 2.433 Change (%) -10.313 45.540 11.A.809 11.2 -19.435 4.632 13.107 7.633 2.9: Imports of wool knotted carpets (Tonnes) Countries USA Germany Czech Republic United Kingdom 2001 26.699 Change (%) -12.

591 2003 13.205 45.A.474 7.696 2005 34.822 62.Exhibit 5.509 6.345 47.653 28.646 2.11: Imports of wool tufted carpets (Tonnes) Countries USA UK Germany Australia Canada Others Total Source: IWTO 2001 25.091 66.A.584 73.480 Change (%) -28.391 36.9 -21.346 5.568 19.506 49.10: Imports of wool woven carpets (Tonnes) Countries USA UK UAE Germany Russian Federation Others Total N.054 5.541 2008P 21.994 4.: Not available.7 -3.6 7.2 -33.425 2008P 2.253 N.771 46. 2.879 10.2 -18.632 2007 21.725 2003 2.642 2005 1.023 75.077 77.996 7.894 10.8 -21.560 2008P 15.468 9.A.0 39.720 16.106 16.301 496 21.260 9006 2.546 3.617 535 24.434 1.726 2007 2.860 107.296 25.309 16.084 16.7 -30.5 -33.717 3.172 71.227 14.A.9 Exhibit 5.830 7.705 95.830 2005 17.085 19.966 5.954 6.3 370 .9 3.499 92.701 11.738 24.192 2.9: Imports of wool knotted carpets (Tonnes) Countries Turkey Others Total Source: IWTO 2001 1.813 7.933 18.319 2007 36.758 35.958 18.885 19.7 Exhibit 5.603 9.746 19.210 N.867 Change (%) 6. 3.9 -11.143 Change (%) -40.237 4.190 5.263 2003 31.6 -39.030 4.254 1.295 71.7 -42.371 1.559 3.919 8.372 80.9 -23.A.A.199 4. Source: IWTO 2001 13.044 2.

479 124.006 24.930 179.5% decline in exports.927 191.000 2007 28.5 -6.325 10.108 2007 32.045 104.026 22.0 -7.903 5.832 2005 19. China.638 Change (%) -17.4 -16.9. etc.9 -28.324 18. In line with the fall in demand for woollen products.506 17.Steep fall in exports of woollen products 5.991 15.276 156.A.289 2005 29.987 2008P 28. also saw a decline in their exports.040 7.5 -8.8.678 20. In wool tops.355 Change (%) -13. respectively.12: Exports of wool tops (Tonnes) Countries China Uruguay Argentina Czech Republic Germany Others Total Source: IWTO 2001 8.066 156. Both the countries recorded sharp declines of 13. Exhibit 5.3% of global exports of wool tops in 2008.451 18.031 2003 30.367 25. China is the largest exporter of wool worsted yarn.772 14. followed by Uruguay.925 12.239 7.173 15.638 19.661 28.999 87.048 25.403 11.950 27.209 14.352 26.5 -3.558 13.7 371 . accounting for 18% and 14.431 14.265 23.311 5. with the single largest share of 27% in world exports of wool worsted yarn in 2008. in their exports during 2008.297 17.144 104. Exhibit 5.435 12.003 17.396 13.021 184.751 57.456 19.899 103.735 2003 8.016 2008P 23.717 14. During 2008.470 75.486 110. the year 2008 witnessed significant decline in exports across different categories. Germany.6 -15.831 15.868 12.A.A.13: Exports of wool worsted yarn (Tonnes) Countries China Hong Kong Germany Italy Poland Others Total Source: IWTO 2001 37. are the largest exporters.278 25.2%. it reported a 17.009 265.923 30.715 19. Italy.4% and 16.415 28.420 16.5 5.828 14.460 13. Poland.862 12.197 37.247 7.0 -23.791 8.7 -15.8 -5.2 -4.A.4 -29.798 84. Other leading exporters such as Hong Kong.

119 6.653 9.A.a.6 N. N.853 57. n. In wool woollen yarn.8 n. it recorded lower exports of both these categories of wool products.14: Exports of wool woollen yarn (Tonnes) Countries New Zealand Belgium China Hong Kong Lithuania Others Total Source: IWTO 2001 6.396 16.247 8.495 54.5 -15.0 -5.245 9.735 43.532 2007 8.527 2003 5.A.8 -8.086 2007 10. In fact.185 4. Exhibit 5. During 2008.472 2. 12.10.700 2008P 7.5%. with a share of around 21% each (2008).312 55. In the case of wool woven carpets. -33. India and UK are the world’s leading exporters.912 12.976 10. China.890 5.A.689 50.884 3.A.716 3.A.803 N.611 10.991 15.634 10.672 N. while New Zealand’s exports grew by 4%. Source: IWTO 5.A.4 -31. N.390 12.697 Change (%) -15.4 -16. all the leading five countries reported fall in exports during 2008.086 5.A.557 45.0 -13.a.231 N.611 Change (%) 4.0 5.663 20.: Not available.926 N. Exhibit 5.928 -36.: Not applicable. while China managed to record an impressive 33.4% 372 .339 5.950 4.144 17.3 -142. 7.A.2 -91. During 2008.489 45.717 4. during 2008.15: Exports of wool knotted carpets (Tonnes) Countries India Iran Afghanistan Pakistan Nepal Others Total 2001 3.243 13.5.371 6.6 36.A.045 49.486 2008P 11.625 14.441 42.A.677 60 15. 7.493 113.939 7.2 -6. New Zealand and Belgium are the leading exporters.593 7.A. respectively.811 2003 8. India is the world’s leading exporter of wool knotted carpets as also wool tufted carpets.12.544 6.278 13.983 2005 62. in total world exports.866 21.716 1. During 2008. those of Belgium declined sharply 13.11.352 10.569 548 15.868 15. with shares of around 13% each in 2008.357 2005 8. 17. with a share of 18% and 19%.A.984 5.374 58.

4 -20.569 8.4 -16. China’s production.685 9. However.667 5.407 7.8 -24.A.236 24.555 5.308 4.343 3 .155 5. Australia and New Zealand’s wool production has been on a decline.719 5.362 16.326 44.17: Exports of wool tufted carpets (Tonnes) Countries India Belgium New Zealand China Netherlands Others Total Source: IWTO 2001 2. continues to rise. COUNTRY STUDY 5.223 3.495 5.525 26.4 -4.365 4.585 9.8 -30. on the other hand.041 23.4%. exports from India and UK declined by 29.766 27.2% and 3. Australia.185 8.149 1.718 Change (%) 33.870 9.476 50.954 7.835 2008P 5.350 26.131 2007 4.077 8.357 41.1 -12.109 4.979 N.690 18.033 8. Exhibit 5. 373 .9 -4.123 4.465 5.092 16.871 N.529 11.A. 8.715 5.706 64. China and New Zealand are the world’s leading producers of wool. respectively.864 2008P 13.A.626 30.154 12. In 2008.16: Exports of wool woven carpets (Tonnes) Countries China India UK Belgium UAE Others Total Source: IWTO 2001 876 6.4 -29.435 76.709 7. 8.2 -3.580 5.453 12.6 -1.166 1.529 2005 2.323 2.119 7.480 42.140 Change (%) -2.833 11.569 3.883 4.13.242 3.063 7.A.A.7 31.417 39.172 2003 3.3.930 2003 906 7.A.8 -11.941 68.784 2005 5.797 19.490 2007 13. both Australia and New Zealand’s wool production recorded a decline over production in 2007.7 Exhibit 5.increase in exports of its wool woven carpets.3 5.

The rising demand for production of sheep for meat on account of the strong demand for exports has affected wool production.A.7 million tonnes in 1990 to 0. The dominant sheep breed in Australia is the Merino.3% lower than production in 2007. Australia has been witnessing falling production of wool over the years. largely on account of drought/drier seasonal conditions as also better returns from other farming activities such as cropping and sheep meat. One of the major reasons for falling wool production in Australia is the lower number of sheep. Over the last two decades. Production in 2008 was 8.) 180 160 140 120 100 80 60 40 20 0 1990 1995 2000 2005 2007 2008P Source: IWTO 5. From around 170. From 1. production of wool (greasy) in Australia has more than halved to 0.14.3 million tonnes by 2008. accounting for about 80% of all sheep.AUSTRALIA 5.1 million tonnes in 1990.9 million by 2008. Australia is the leading producer of wool in the world.18: Australia: Wool production ('000 tonnes) 1200 1000 800 600 400 200 0 1990 1995 2000 2005 2007 2008P Australia: Share in world wool production (%) 40 35 30 25 20 15 10 5 0 1990 Greasy wool 1995 2000 2005 2007 2008P Greasy wool Clean wool Clean wool Source: IWTO 5. Exhibit 5.A.19: Australia: Sheep population (Million nos. Production of clean wool has also come down over the years.16.A.15. 374 .4 million tonnes by 2008. Exhibit 5.2 million numbers in 1990. from 0.A. sheep population has fallen to just 76. The falling production of wool in Australia can be attributed to two reasons – drought and decline in sheep population.A. the Australian wool growing and wool processing industries have reduced in size.

2% during the same period. 5. the share of the 19-20 um micron and <18. As per the Committee. share of this category of wool in total production is estimated to come down to 17% from 19% in 2008-09.A.5% in 1008/09.5 um 141 142 128 119 20.Production estimated to fall in 2009-10 5. While share of the 19-20 um micron range has increased from 17.5 um micron has increased.5 um and finer) in 2009-10. For instance. the share of wool in the 21-24 um micron range has fallen sharply from 66.6 um and broader 60 57 49 45 E: Estimate. The Australian Wool Innovation Production Forecasting Committee forecasts production of shorn wool to decline to 330 million kg (greasy) in 2009-10 season. Consequently. from an estimated shorn wool production of 359 million kg in 2008-09 season. Exhibit 5. Source: Australian Wool Innovation Limited 375 .18. On the other hand.5 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1992/93 1996/97 2000/01 2004/05 2008/09 19 20 21 22 23 24 25/26 27/28 29/30 >31 Source: Australian Wool Exchange Exhibit 5.5 um 144 131 114 107 24.A.6 um to 24.6 um to 20. F: Forecast.1% in 1992/93 to 31% by 2008/09.17.20: Micron profile of Australian wool (% share) <18. production of super fine wool is expected to see the steepest fall (of 19% . Since the early 1990s there has been a significant shift in the micron profile of Australian wool. The main reason for the fall in wool production is the fall in number of sheep.18.2% to 19.A.5 um and finer 85 73 69 56 18.A.21: Australia: Volume of production by micron category (Million kg) Year/Category 2006-07 2007-08 2008-09E 2009-10F 18. that of the <18.4% in 1992/93 to the single largest share of 35.5 um micron wool has increased from a mere 2.

7% 3.7% 19.6% 2.9% 17.9% 2.7% 17. Exhibit 5.9% 6.5% 4.1% 2007/08 2. compared with the year earlier.0% 9.9% 5.2% 9.7% 4.9% 1.1% 5. largely due to lower super fine wool prices.3% 4.9% 16.5% 2.7% 9.1% 11.19.2% 2008/09 2.1% 10. The shift to fine and super fine Merino sheep seen in the first half of the decade appears to have halted.7% 3.6% 4. have resulted in a broadening of the wool shorn in these regions.0% 4.9% 3.4% 14.5 17 18 19 20 21 22 23 24 25/26 27/28 29/30 >30 2005/06 1.9% 11.7% 11.8% Source: Australian Wool Exchange 376 .2% 5.4% 16.5% 3.0% 5.8% 15. Greater joinings of Merino ewes to terminal sires has lifted the proportion of broader wool.3% 10.8% 3.7% 18.4% 3.6% 2006/07 2.3% 3.8% 2009/10 1.6% 2.5% 5. There are four main reasons for the shift in the micron profile of the Australian clip to more medium Merino wool.4% 1.5% 4.2% 16.4% 9.0% 5.7% 15.    Increased emphasis by wool growers on a combination of fleece and body weights.1% 4.22: Australian micron profile – Estimates & Forecasts Micron category <16.4% 4.3% 3.3% 9.0% 14.8% 18.2% 2.A.1% 18.6% 16.9% 4.5.2% 3.6% 1.8% 15.A. These are mentioned as follows:  Better seasonal conditions in the northern half of eastern Australia for the 2009-10 wool growing season.5% 4.9% 2.

carded or combed (including combed wool in fragments) Yarn of carded wool.Exhibit 5. including yarn waste but excluding garnetted stock Garnetted stock of wool or of fine or coarse animal hair Wool and fine or coarse animal hair.23: Australia: Duty structure for wool & woollen products (%) (2008) HS Code Commodity description Average of all Ad valorem duties in the HS sub-heading 0 0 0 0 0 5101 5102 5103 5104 5105 Wool. not carded or combed Fine or coarse animal hair. not put up for retail sale Yarn of wool or of fine animal hair.A. not put up for retail sale Yarn of fine animal hair (carded or combed). whether or not put up for retail sale Woven fabrics of carded wool or of carded fine animal hair Woven fabrics of combed wool or of combed fine animal hair Woven fabrics of coarse animal hair or of horsehair 5106 5107 5108 5109 5110 5 5 5 5 5 5111 5112 5113 10 10 10 Source: World Trade Organization 377 . not put up for retail sale Yarn of combed wool. put up for retail sale Yarn of coarse animal hair or of horsehair (including gimped horsehair yarn). not carded or combed Waste of wool or of fine or coarse animal hair.

A. Sheep population in China had increased until the mid-2000s.21.) 160 140 120 100 80 60 40 20 0 1990 1995 2000 2005 2007 2008P Source: IWTO Exhibit 5. From 0. In 2008. Production in 2008 was 11. From 146 million numbers in 2007.A.A. production of wool in China is increasing. there has been a decline.24: China: Sheep population (Million nos. Production of clean wool has remained more or less at the same level since 2005. However. After Australia.4% higher than in the preceding year. China’s share in world clean wool production has nearly doubled from 8% in 1995 to 15% in 2008. after recording good growth in the preceding few years.25: China: Wool production ('000 tonnes) 450 400 350 300 250 200 150 100 50 China: Share in world wool production (%) 25 20 15 10 5 0 1990 1995 2000 2005 2007 2008P 0 1990 Greasy wool 1995 2000 2005 2007 2008P Greasy wool Clean wool Clean wool Source: IWTO 5.A. From 0. China had a share of 13% in world greasy wool production.1 million tonnes in 1990.2 million tonnes in 1990 production of greasy wool in China has increased to 0. Around ten years back. China accounted for 19% of world greasy wool production in 2008. China is the largest producer of wool in the world. population of sheep in China declined to 136. it grew by 2. production of clean wool in China had risen to around 0.CHINA 5.175 million tonnes during 2005-2007.20. Exhibit 5. China has the largest sheep population in the world.5% to 0.179 million tonnes. in 2000. 378 . And unlike the global leader. thereafter.4 million numbers in 2008.4 million tonnes by 2008.

5 11. not put up for retail sale Yarn of fine animal hair (carded or combed). not carded or combed.A.3 9 10 Average of all Ad valorem duties in the HS sub-heading 38 9 5111 5112 5113 10 10 10 Source: World Trade Organization 379 . not put up for retail sale Yarn of combed wool. whether or not put up for retail sale Woven fabrics of carded wool or of carded fine animal hair Woven fabrics of combed wool or of combed fine animal hair Woven fabrics of coarse animal hair or of horsehair 38 38 38 5 5 5 5 5 5 6 6 23. Carded wool Combed wool in fragments Other Of Kashmir (cashmere) goats Other Coarse animal hair. including yarn waste but excluding garnetted stock Noils of wool or of fine animal hair Other waste of wool or of fine animal hair Waste of coarse animal hair Garnetted stock of wool or of fine or coarse animal hair Wool and fine or coarse animal hair.26: China: Duty structure for wool & woollen products (%) (2008) HS Code 5101 5102 5103 510310 510320 510330 5104 5105 510510 510521 510529 510531 510539 510540 5106 5107 5108 5109 5110 Commodity Description Wool. not put up for retail sale Yarn of wool or of fine animal hair. carded or combed (including combed wool in fragments).Exhibit 5. not carded or combed Fine or coarse animal hair. put up for retail sale Yarn of coarse animal hair or of horsehair (including gimped horsehair yarn). carded or combed Yarn of carded wool. Waste of wool or of fine or coarse animal hair.

In 2007. hand-knitting yarn. New Zealand is the world’s largest producer of strong (crossbreed) wools. The continued move towards meat breeds and their genetic traits in the overall New Zealand flock is also resulting in a lower per sheep wool yield. New Zealand also suffers from falling sheep numbers.A.22. New Zealand is among the top 10 countries in the world in terms of population of sheep. hand-made carpets. Higher lamb export prices as also increase in cost of shearing over the years. New Zealand.24. The main uses of New Zealand cross-bred wool are machinemade carpets. New Zealand also produces significant volumes of mid-micron and finer wools.1 million numbers. Fine wool is used mainly for fashion apparel.3% to New Zealand’s GDP (2004-05).23. The Ministry of Agriculture and Forestry. have resulted in farmers giving greater attention to breed sheep for meat. upholstery and furnishings. New Zealand had a sheep population of 39. New Zealand 380 .A. while strong wool is suited to interior applications such as carpets.NEW ZEALAND 5.27: New Zealand: Wool production by type Medium 15% Fine 5% Strong cross-bred 49% Fine crossbred 31% Source: Ministry of Agriculture and Forestry. The wool industry contributed 0. the seventh largest population in the world.A. blankets and upholstery.A. produced from sheep breeds such as Romney that are farmed for both meat and wool production. 5. Most of the wool produced in New Zealand is cross-bred wool. Like the other producers. 5. with knitwear and woven apparel being much more minor uses now. New Zealand is the third largest wool producing country in the world. expects sheep numbers to fall further during 2009/10. and as a result. producing around a third of the world’s production. Exhibit 5. expects wool production to fall in line with the decline in sheep numbers.

production once again declined. It declined by another 5. to reach a level of 0.158 million tonnes in 2005.22 million tonnes by 2007. 5.com 5. Production had increased in the next couple of years.29: New Zealand: Wool production 350 New Zealand: Share in world wool ('000 tonnes) production (%) 16 14 12 300 250 200 10 8 6 4 2 0 1990 Greasy wool 1995 2000 2005 2007 2008P 150 100 50 0 Clean wool 1990 Greasy wool 1995 2000 2005 2007 2008P Clean wool Source: IWTO 381 .26.2 million tonnes in 1990. production of clean wool came down to 0.8% to 0. In 2008.A. to reach 0.154 million tonnes. wool has become a by-product of the sheep farming industry in New Zealand. New Zealand’s share in world production of wool has remained more or less stable in the last once decade – at around 10% in the case of greasy wool and at around 13% in the case of clean wool. wool production has declined over the years.28: New Zealand wool categories sold at auction 2007 Medium (25-32 micron) 6% Fine (<24 micron) 7% Strong (>32 micron) 87% Source: www.25.A. Production of greasy wool has come down from 0. On account of low wool prices in comparison to lamb prices and high shearing costs. As a result. in New Zealand too.Exhibit 5. the sheep population has been on a decline.meatandwoolnz.3 million tonnes in 1990 to 0.8% in 2008. From 0.A. As in the case of Australia.A.20 million tonnes.164 million tonnes in 2007. by 5. Exhibit 5. The trend in production of clean wool is in line with the trend in production of greasy wool.

not put up for retail sale Yarn of wool or of fine animal hair.5 2. not put up for retail sale Yarn of combed wool. carded or combed (including combed wool in fragments) Yarn of carded wool.5 Source: World Trade Organization 382 . mixed mainly or solely with man-made staple fibres Other Woven fabrics of combed wool or of combed fine animal hair Of a weight not exceeding 200 g/m² Other Other.5 2.5 2.5 5 2.5 5101 5102 5103 5104 5105 5106 5107 5108 5109 5110 5111 511111 511119 511120 511130 511190 5112 511211 511219 511220 511230 511290 Wool. whether or not put up for retail sale Woven fabrics of carded wool or of carded fine animal hair Of a weight not exceeding 300 g/m² Other Other. including yarn waste but excluding garnetted stock Garnetted stock of wool or of fine or coarse animal hair Wool and fine or coarse animal hair.A. put up for retail sale Yarn of coarse animal hair or of horsehair (including gimped horsehair yarn).30: New Zealand: Duty structure for wool & woollen products (%) (2008) HS Code Commodity description Average of all Ad valorem duties in the HS subheading 0 0 0 0 0 5 5 0 5 2.Exhibit 5. not put up for retail sale Yarn of fine animal hair (carded or combed). mixed mainly or solely with man-made filaments Other. not carded or combed Waste of wool or of fine or coarse animal hair. mixed mainly or solely with man-made staple fibres Other 2. mixed mainly or solely with man-made filaments Other.5 2.5 2. not carded or combed Fine or coarse animal hair.5 5 2.

INDIAN SCENARIO Exhibit 5.04 lakh 4.525 1 4 3 3 61. Non-worsted spindles 4.4.37 lakh 7.411 7.5.620 220 10.437 296 1. (a) Machine-made carpets (b) Hand-made carpets Source: Ministry of textiles 30 million kg 3.469 383 .062 633 926 3.32: State-wise sheep population* (In ‘000 nos.256 4 546 121 3.A.A.376 19 170 382 680 2. Powerlooms 5.094 6 States Meghalaya Orissa Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal Mizoram Nagaland Delhi Pondicherry Total Population 18 1. Source: Ministry of textiles Population 21.) States Andhra Pradesh Arunachal Pradesh Assam Bihar Jharkhand Gujarat Haryana Himachal Pradesh Jammu & Kashmir Karnataka Kerala Madhya Pradesh Chhattisgarh Maharashtra Manipur *2003.31: Installed capacity of the industry 1.228 0.593 3 1.054 6 5.A.50 million square meter 9 million square meter Exhibit 5. Worsted spindles 3.57 million kg 6. (a) Wool combing (b) Synthetic fibre combing 2.

9% Pakistan 6.8% 2008-09 China 2.5.0 3.3% Source: DGCI&S Exhibit 5.5% Italy 6.3 6.5% Syria 1.A.9 8.3% Turkey 3.5.5 4.7 384 .5 2.5% Australia 19.A.1 3.4% China 18.35: Raw wool imports (In tonnes) Countries Australia New Zealand Pakistan Italy Syria 2002-03 20937 11169 1094 5949 1770 2003-04 16141 7893 2459 6891 1567 2004-05 16790 9652 1270 5491 1236 2005-06 19007 10535 2721 5625 1595 2006-07 20937 12907 4716 6337 3313 2007-08 18621 12179 6061 5422 4440 2008-09 17908 8712 4045 3579 3103 Share (%) 27.6 3.A.5% Pakistan 1.4 1.A.3 13.7 4.6 2.3% Italy 5.2% New Zealand 13.33: Import of raw wool (2008-09) (In ‘000 tonnes) 20 18 16 14 12 10 8 6 4 2 0 17.2 5.0 2.5% New Zealand 11.7% Turkey 8.9 Source: DGCI&S Exhibit 5. FOREIGN TRADE Exhibit 5.34: Change in composition of India’s raw wool imports 2004-05 UK 3.8% UK 4.6% Australia 27.9% Syria 4.

617 92.A.904 65.6 3.36: Import of raw wool Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Volume (Tonnes) 73.8 870.40 1.078.659 84.753 90.90 Source: DGCI&S 385 .1 1.9 Exhibit 5.088.185 99.10 1.3 2.Exhibit 5.6 0.612 84.9 3.6 2.35: Raw wool imports (In tonnes) Countries UK Saudi Arabia Turkey South Africa China Russia Spain USA Argentina Uruguay World Source: DGCI&S 2002-03 1105 4351 6080 770 1301 153 1731 448 1872 1936 73659 2003-04 3088 3906 4339 1140 13856 210 1535 936 2116 2497 84612 2004-05 2977 3724 7050 1036 16015 24 1352 557 1306 750 84753 2005-06 2497 4817 5294 1927 15441 38 1509 553 1025 456 90185 2006-07 2879 4867 5798 1759 15502 794 849 530 750 754 99617 2007-08 3648 3186 5303 2538 7622 1100 966 796 1143 1123 92904 2008-09 3037 2577 2498 2392 1872 1487 1368 1115 1078 613 65653 Share (%) 4.653 Value (Rs crore) 801.6 867 903 1.9 2.031.8 3.A.7 1.

088.40 2008-09 1.6 153.4 1376.1 199.Exhibit 5.3 7.0 20.031.2 4.7 167.078.8 24.9 112.5 11.4 11.3 101 83.5 148.5 5.7 386 .A.1 2007-08 568.7 144.2 2003-04 452.9 1155.4 171.5 90.37: Import of woollen & cotton rags (Tonnes) Tonnes % 140000 120000 100000 80000 60000 40000 80 60 40 20 0 -20 -40 20000 0 Volume (LHS) Growth (RHS) Source: Ministry of Textiles Product-wise import statistics: Exhibit 5.9 986.A.8 7.4 16.3 4.6 29.8 2003-04 870.10 2007-08 1.6 Exhibit 5.2 1.1 2005-06 451.7 34.9 9.9 133.38: Imports of wool & woollen products (Rs crore) Products Raw wool Woollen yarn & fabrics Woollen & cotton rags Total Source: DGCI&S 2002-03 801.9 40.2 32.3 9.1 190 96 1374.0 106.1 175.0 37.A.7 17.6 22.1 20.6 2006-07 566.9 134.2 47.2 68.3 113.5 1293.5 140.7 13.8 206.39: Imports of raw wool (Rs crore) Countries Australia New Zealand South Africa UK Argentina USA 2002-03 478.3 4.90 CAGR (%) 4.5 14.9 12.6 1173.6 11.9 7.6 2004-05 867 2005-06 903 2006-07 1.5 2004-05 419.6 1308.7 115.5 128.7 29.0 63.4 2008-09 596.

1 11.0 18.6 34.3 12.6 11.4 8.4 9.4 0.3 12.8 14.1 6.8 2003-04 29.9 22.5 5.3 9.8 6.3 2004-05 13.6 2004-05 26.3 11.9 16.4 59.6 6.2 9.0 8.7 22.9 31.0 15.0 5.4 8.6 3.088.8 13.6 2.0 67.0 3.3 8.1 9.7 5.4 20.9 19.4 75.4 903.1 21.2 10.2 19.4 9.0 2005-06 27.4 17.5 7.9 4.A.4 0.3 5.8 9.7 6.7 7.7 30.5 0.5 5.1 8.1 3.5 1.3 2.2 4.0 3.9 3.0 1.4 5.3 5.3 19.7 16.9 27.078.2 9.1 387 .1 15.9 Exhibit 5.0 8.2 6.7 1.8 39.3 6.7 4.39: Imports of raw wool (Rs crore) Countries Italy Russia Pakistan China Syria Saudi Arabia Turkey Uruguay Spain World Source: DGCI&S 2002-03 21.3 19.9 14.2 20.2 4.031.2 0.0 22.40: Imports of woollen & cotton rags (Rs crore) Countries Bangladesh Netherlands Canada Poland USA Italy Belgium UK UAE Korea Republic (South) Malaysia 2002-03 4.3 9.5 16.5 2008-09 24.9 32.8 2006-07 5.3 5.2 12.0 2007-08 15.7 6.4 1.1 10.8 16.3 4.5 7.7 6.4 17.6 0.9 8.0 1.9 17.4 21.1 2007-08 23.7 2005-06 0.7 7.7 5.5 6.9 5.0 14.2 7.4 2.0 2006-07 28.Exhibit 5.0 0.4 70.6 4.4 24.5 2.4 19.A.4 12.5 2.6 801.5 17.1 1.5 5.4 5.3 26.6 5.8 11.3 8.0 11.3 7.1 19.5 3.4 2003-04 0.1 867.5 13.0 15.3 11.2 18.3 870.4 2008-09 17.

72 8.56 0.24 100.42 0.03 37.0 0.39 5.93 2004-05 70.18 2.4 2007-08 1.14 0.40 1.96 0.23 0.75 3.06 0 0.5 1.36 1.13 9.22 167.93 105.2 90.00 0.46 0 0.72 5.2 1.12 175.66 2.80 2.76 2.A.69 0.75 2.03 0.6 2006-07 1.05 1.6 1.41 0.26 190.78 89.64 3.51 0.9 2005-06 2.89 0 0 6.81 0.0 2008-09 1.90 0.02 1.94 0.7 0.47 7.4 1.79 3.51 0.9 83.35 1.3 0.34 9.60 2007-08 72.15 0.Exhibit 5.10 0.79 3.05 4.17 0.2 96.96 2003-04 40.5 2.79 0.02 0 0.53 388 .40 13.89 0.35 5.11 0 2.1 1.39 1.47 0.21 0.11 0 0.42 0.41 83.5 Exhibit 5.18 171.45 0.02 2008-09 63.43 0 4.5 2.8 134.65 0.48 2.86 2005-06 70.96 2.68 0.82 0 0.48 1.62 9.8 112.29 0.71 4.00 2.41: Imports of woollen yarns & fabrics (Rs crore) Countries China Italy Japan Uruguay UK Canada Viet Nam Turkey France Korea Republic (South) USA Mexico Australia Spain Switzerland World Source: DGCI&S 2002-03 21.53 3.00 0 6.5 1.0 18.84 9.5 1.10 0.01 144.03 206.11 2006-07 67.86 8.2 153.8 199.53 63.0 2.58 0.6 2004-05 1.08 0.64 1.83 1.54 3.06 0.05 0.9 2003-04 1.40: Imports of woollen & cotton rags (Rs crore) Countries Germany Pakistan Hungary Tunisia World Source: DGCI&S 2002-03 1.55 39.41 0.96 0.31 7.17 0.03 41.0 0.A.69 7.76 12.

9 385.5 2.4 25.4 *Wool.4 19.8 19.8 2004-05 44.2 3.6 2006-07 57.6 4. fabrics.5 456.6 7.9 7.2 1.6 1.6 1.0 8.3 15.8 10.7 7.3 6.1 40.1 394.0 7.9 4.0 7.1 16.1 7.6 267.A.6 2005-06 50.0 8.9 0.9 5.9 41.3 20.4 377.6 6.43: Woollen yarn.6 246.A.4 2003-04 21.0 4.42: Export of wool* (Rs crore) Year 2005-06 2006-07 2007-08 2008-09* Exports 358.1 18.2 9.8 41.3 0.8 8.2 1.0 11.9 9.2 26.2 5.2 10.8 0.0 8. horsehair yarn and woven fabric.4 14.8 11.7 33.6 2008-09 80.1 13.6 2.4 11.6 11.9 0.7 18.2 0.6 5.1 29.0 3.7 8.0 9.7 70.1 1.6 3.6 53.4 2.8 37.Exports Exhibit 5.3 1.5 19.0 12.1 313.3 40.1 17.0 0.7 373.9 1.9 7.7 0.4 23.1 23.1 1.9 6.6 8.8 416.4 17.9 60.0 7.9 6.3 5.6 9.0 18.7 6.**Up to Dec 08 Source: DGCI&S Product-wise export statistics: Exhibit 5.0 462. made-ups etc (Rs crore) Countries UK Italy USA Dominican Republic UAE Vietnam Sri Lanka China Saudi Arabia Germany New Zealand Japan Belgium Egypt Indonesia World Source: DGCI&S 2002-03 10.4 7.9 11.9 16.1 23.8 10.5 2007-08 75.5 5.5 389 .6 56.4 4.9 16.2 11. fine or coarse animal hair.1 48.8 13.1 13.

2 130. have a direct bearing on the overall growth and development of the Indian wool & woollen products industry.8 10.9 2007-08 445.6 20.4 119.8 13.1 66.4 1.8 33.5 16.2 111.0 205.27.2 43.8 21. There are certain issues & concerns.743.3 39.5 39.9 119.6 18. the domestic carpet industry faces 390 .8 25.4 82. which though not directly related to wool fibre.9 24.1 45.0 24.7 56.4 9.3 19.409.9 29.6 25.2 202.8 18.2 18.Exhibit 5.0 16.8 49. The major problem of the carpet industry is related to raw materials.9 1.9 115.5 49.560.1 1.1 40.8 4.5 5.9 104. both in terms of price and quality.2 5.3 131.7 37.3 53.1 22.8 1.3 2.3 96.9 2006-07 546.1 2003-04 424.9 40. These are discussed as follows: Carpet industry 5.9 30.7 0.6 25.A.5 10.4 35.0 67.3 124.1 14.9 86.6 41.2 23.A.6 23.4 57. On account of the insufficient quality of wool and high wool prices.3 53.057.44: Readymade wool garments (Rs crore) Countries USA UAE UK Germany France Spain Italy Canada Denmark Netherlands Japan Saudi Arabia Oman Tanzania Belgium World Source: DGCI&S 2002-03 388.6 1.3 50.4 0.0 5.0 15.7 68.28.1 29.0 35.2 12.A.6.8 77.5 2005-06 631.5 2008-09 429.1 87.3 14.3 1.7 59.6 40.5 74.4 26.2 69.8 53.6 24.6 78.9 0. ISSUES AND CONCERNS OF USER INDUSTRIES 5.8 7.4 8.8 132.1 9.1 1.7 1.9 39.0 147.6 20.1 84.9 42.8 25.5 24.1 73.0 21.8 54.3 2004-05 552.7 114.533.3 104.285.640.7 80.0 12.4 75.A.

5.A. particularly in spinning plants. The industry is currently using old/outdated technology.stiff price competition from other exporting countries. 5. Also. This process of mutilation by the middlemen adds to the cost of raw materials.A.A. Shoddy industry 5. polyester. 5.A. UK.29. Prices of wool have risen sharply. in the case of hand-made woollen carpets. particularly from Pakistan and Nepal. viscose yarn.A. This is on account of the stipulation of permitting only pre-mutilated rags for import in the Domestic Tariff Area (DTA) sector (under which the shoddy industry operates) as raw material. The Indian shawl and scarf manufacturing industry is facing high raw material cost pressure. On the export front. Shawl/scarf industry 5. etc. Another concern faced by the industry is that there is ban on shoddy units from being set up in SEZs/EOUs. the industry is unable to attract foreign manufacturers in the DTA sector. while the industry has to face weakened demand on account of the global slowdown. high transaction cost adds another 20-25% on the cost of the raw material.31. the middlemen remove good material from the original rags and sell it elsewhere. with majority of exports going to these markets. Unlike in other countries where uncut mutilated rags are collected and sold by the original graders to the shoddy industry. One of the major problems the shoddy industry in India faces is the high cost of raw material. 5. Technology upgradation is required. in India.33.34.30. Prices of other inputs such as acrylic.A. however it is dependent on traditional markets such as US. The carpet industry is export-oriented. the shawl and scarf manufacturing industry is using old/outdated machinery and technology in the processing segment. etc. 5. Another area of concern is machinery/technology upgradation. 391 . Also. sometimes by 30-40%. it is also facing severe competition from China. particularly because of drought in Australia since the last 3 years. have also witnessed sharp increases in the recent past. thereby depriving the domestic shoddy industry of cheaper raw material.A. Many a times.35. This results in inadequate quality of finished products. On account of these reasons. the mutilated rags which are exported to India as raw material are sold by the original graders to middlemen who mutilate these rags as per the Indian Customs regulations and are then shipped to India.32.

more consumers could prefer such carpets in place of hand-made carpets. Rising imports of carpets made from man-made materials has multiple implications on the domestic carpet industry. During the period between 1998-99 and 2007-08.36.A. which is not available locally. thereby impacting demand for hand-made carpets. On the one hand. and grew at a rate of about 35% and 15% in the following two years. and adversely impact the employment potential in the long term. the domestic wool & woollen products industry is paying duty on importing raw wool.37.Rising imports of carpets made from man-made textile materials 5. While on the one hand. when imports surged by nearly 100%.A.A. While on the one hand the country is among the leading exporters of wool knotted and tufted carpets.45: Imports of carpets made from man-made textile materials (Rs crore) 18 16 14 12 10 8 6 4 2 0 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 Source: DGCI&S 5. 392 . Exhibit 5. Lack of control to tackle this malpractice where counterfeit products of reputed brands are being sold in the market is endangering the business of the domestic players. the domestic industry has to fight competition from rising imports of carpets made from man-made textile materials. imports of such carpets have grown at a CAGR of as much as 15.A. on account of the cheaper price and lower maintenance of such carpets.7%. Belgium accounts for 50% of India’s total imports of carpets made from manmade textile materials (2007-08). The problem of rising imports have taken a turn for worse since 2005-06. This in turn.38. Influx of counterfeit and spurious goods 5. could impact the domestic industry’s income generation capacity. on the other hand it is facing the problem of influx of counterfeit and spurious goods into the local market.

A. ED. Avika Nagar ED. Thane Designation Convenor Member Member Member Member Member Member Member Member Member Member Member Member Member 10. Chairman. Chaudhari.A. Thane 11. Shri S. COMPOSITION OF THE SUB GROUP ON WOOL S. 3. 4. Name Shri S S Gupta. New Delhi Shri Aditya Kumar Shri S A Karim. Thane Shri T. Ministry of Textiles. Section Officer. Director.A.R. Mir. import duty on certain machinery required for the woollen industry which is not manufactured in the country needs to be rationalised. MD. 8. CWDB.. Secretary. Shri S. Singhal. WOOLTEXPRO.39. 9. of Textiles Director (Wool). Ludhiana Director.7. 2. Mumbai Shri Sharad Thakur. Thane 13. The specified textile and garment machinery currently attract an effective import duty of 27. Scientist-E. 5. Udyog Bhawan. President (Textiles). S. Australian Wool Innovation 14.Recommendation for Machinery 5. Shri Ravikant Kapur. 5. No 1. WRA.K. Min. Jodhpur Shri Mahesh N Sanil. MoT 393 .K. Dr. Oswal Woollen Mills.Rao. Wool Research Association. Jt. Babbar. 7.K.07%. Raymond Ltd. Srinagar 12. To encourage technology upgradation in the industry. 6. GM. Cashmere Marketing Agencies. CSWRI. Wool Research Association. Shri S.

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