“Incentive rates revision can boost exports” March 2018 issue

Natural sheep wool. India is the 2nd biggest importer of wool in the world, after China

“Incentive rates revision can boost exports”

Ashok Jaidka, Chairman, Wool & Woollens Export Promotion Council (WWEPC) |

The high potential for export of valued-added woollen products from India is impacted by the low production of raw wool produced indigenously. In an exclusive interaction with The Dollar Business, Ashok Jaidka, Chairman Wool and Woollens Export Promotion Council (WWEPC) reasons why the industry needs governmnent handholding

Interview by Naveen Kumar | The Dollar Business


TDB: India’s raw wool consumption is expected to reach 208 million kg by FY2016-17 but India’s indigenous production has been hovering at around 43-45 million kg for the last few years. What are the reasons behind India’s stagnant wool production, and are there initiatives in the pipeline to boost domestics wool production?

Ashok Jaidka (AJ): Wool and woollen textiles industry in the country is primarily a rural-based, export-oriented industry. In this industry the organised sector, the unorganised sector and the rural sector complement each other. India is among the top ten producers of wool in the world. However, domestic production of wool is not adequate to meet the industry demand. Therefore, the industry is fully dependent on imported raw wool.

Ashok Jaidka, Chairman, Wool & Woollens Export Promotion Council (WWEPC)

TDB: As is the case at present, will Indian wool be used only for making carpet, or is there a scope for some high-end exports happening from India? Can adoption of technology help improve quality of finished products?

AJ: A small quantity of apparel grade wool is produced from Pashmina goats and Angora rabbits out of the total production. Maximum quantity of wool produced in India is carpet grade. The production centres of wool are Rajasthan, J&K, Karnataka, Gujarat, Uttar Pradesh, Haryana and Himachal Pradesh. The Union Ministry of Textiles is implementing a lot of schemes through Central Wool Development Board for development of wool sector. Such schemes will definitely increase the production of wool in the country in the near future.

TDB: What are the reasons for the slump in export of woollen products? Do you expect the situation to improve in the near future?

AJ: United States and European Union are the main destinations for India’s woollen products. During FY2012-13 and FY2013-14, due to recession in these big markets the export of woollen products didn’t show desired growth. However, during current financial year, we are getting positive response from these markets and our exports have shown growth of 12% year-on-year between April and November, 2014. The Council is taking efforts for participation in international trade fairs/exhibitions abroad.

TDB: Is it because of difficulties in importing high-quality wool at low cost that India is losing its competitiveness in readymade woollen garments?

AJ: Woollen industry is still facing the problems of high rates of customs duty on wool waste, specified textile garment machinery and spare parts for general machinery. Rigid labour policy, higher transaction cost, problems of power supply and power cost, shortage of skilled and semi-skilled manpower, lower rates of incentives like duty drawback and DEPB are some of the factors affecting the growth of the industry. Further, it is also about fashion trend. Nowadays, people like light weight products, i.e. acrylic/cotton over woollen garments.

TDB: Being a massive consumer of imported wool, do you think the current duty drawback rates for woollen garments are really enough?

AJ: Current duty drawback rates are not adequate. Government should revise them. An upward revision of rates will certainly boost exports from India.

TDB: Apart from traditional export markets like United States and European Union, which markets hold big potential for Indian wool exporters?

AJ: The top 10 destinations for India’s exports account for nearly 75% of total exports of woollen products. Even among the leading export markets, US has the largest share of 24% in total exports. Middle East, particularly UAE, is another important destination for Indian wool. CIS nations are some other high potential retail markets for Indian woollen. The Council is planning to take a delegation to the leading international fairs in focus markets like CIS, Africa, LAC, and ASEAN, regions identified by the Government of India for further strengthening of exports.

India's woollen products exports-TheDollarBusiness


TDB: What steps are you taking to promote wool exports?

AJ: The Government is providing funds under Market Development Assistance and Market Initiative Access schemes to the Council to undertake promotional events outside India to explore possibilities of exports. As a step towards promotion of exports of woollen products, the Council is regularly organising participation of member-exporters in trade fairs abroad. It has proposed export promotional activities in Italy, France, Malaysia, Russia, Germany, Mexico and Panama during the year FY2014-15 and FY2015-16 under MDA scheme. However, funds allocated under these schemes are not sufficient and small councils like us are not getting sufficient budget. Hence, we can manage only two/three promotional activities at a time.

TDB: What role has the government played so far and what steps do you expect from the union and state governments that can help in boosting the export of wool and woollens from India?

AJ: The Government of India is implementing various schemes to improve the quality of wool. However, no separate scheme is available to promote the export of woollen products other than MDA & MAI. We need more such schemes from both centre and state.