In last month's newsletter, we touched on my recent trip to Bangladesh and India in late October, along with consultants from Deloitte, as part of the Domestic & Diversified Wool Processing Project Phase 2.
The purpose of that trip was to meet key government and industry stakeholders in both countries. Industry and government sentiment and strategic priorities both countries show that they can each play a part in trade diversification and trade risk mitigation for the Australian wool industry. The trip was integral in forming relationships within the Bangladesh textile trade and further strengthening our ties with India.
The Australia-India Wool Industry Roundtable in Delhi, on 25 October this year coinciding with my trip, demonstrated to the Indian government that the Australian industry is serious about working with India, particularly given that it was the second in-country meeting in seven-months. During the two meetings in India this year, along with WoolProducers, the Australian wool industry was represented by delegates from AWEX, AWTA, The Woolmark Company, Australian Council of Wool Exporters and Processors and the Shearing Contractors Association of Australia, along with representatives from the Australian High Commission and Austrade.
In the relatively short time since I’ve returned from that trip there have been a number of developments in our relationship with India, culminating in a large Indian delegation of senior industry and government representatives attending the Global (textile) Sourcing Expo in Melbourne and the convening of another Australian-Indian Wool Roundtable in late November.
The wool sector holds immense potential for both India and Australia, offering opportunities for economic growth and bilateral trade. India, the world's second-largest consumer of wool, is witnessing a surge in demand for both raw wool and woollen products. With an annual production of around 40 million kgs of wool and imports totalling 80 million kgs, India's woollen industry is poised for significant growth in the coming years.
Two days before the Roundtable in Melbourne, WoolProducers President, Steve Harrison, hosted Mr. Romesh Khajuria, Chairman of the Indian Wool and Woollens Export Promotion Council and Dr Arvind Kumar, an Indian Government delegate on a day trip to AWTA, the Melbourne Wool Selling Centre to meet with some industry colleagues and to “Redesdale”, Bendigo to observe shearing and wool classing. The day was enjoyed by Steve, Chairman Romesh and Dr Arvid, despite Steve not being able to talk about cricket out of politeness (and in the name of fostering trade relations) given that the Aussies had beaten India in the World Cup only a few hours before.
The Roundtable on 22 November, again saw government and industry officials discuss a number of issues that will strengthen collaboration and relations between the two countries, including co-operation on industry sustainability frameworks and workforce capacity building programs (namely shearing and wool classing).
India's growing economy and expanding middle class are driving the demand for quality woollen products. As a result, the country's wool requirement is projected to increase in the coming years, reaching an estimated 250 million kgs. This growth will be fuelled by the rising demand for woollen products in both domestic and international markets.
In terms of the Australian-Indian relationship in wool, in the time since the Australia-India Economic Cooperation and Trade Agreement (ECTA) came into force, which resulted in the removal of tariffs for Australia’s raw wool, has seen these exports increase from 11 million kgs ($US110 million) in 2021-22 to 14 million kgs ($US135 million) in 2022-23. Whilst this may be seen as only a modest increase, it is important to note that the ECTA was only in place for 6-months of the 22-23 financial year, and it is certainly a step in the right direction.
India also extended an invitation to Australia to attend Bharat Tex 2024 in February 2024, allowing for further cooperation discussions and the exploration of business opportunities between the two countries. Additionally, India expressed its interest in a reciprocal visit to Australia in mid-2024, providing an opportunity to progress discussions on the agreed cooperation interests and farm visits.
India's potential demand for wool presents a significant opportunity for the Australian wool industry to expand their market share. If India's woollen industry experiences rapid growth, meeting the increasing demand for fine wool becomes crucial. With the support of the ECTA, the Australian wool industry can establish themselves as reliable suppliers and contribute to the growth of India's woollen sector. It is an exciting time for both countries to collaborate and hopefully seize the potential offered by this market.
CEO WoolProducers Australia