India's wool imports from Australia growing at 17%

India's wool imports from world's biggest wool exporter Australia is increasing at 17 per cent, but it has a long way to go to be anywhere near China in its knitwear industry and exports.

China uses 60 per cent of Australia's wool exports while India has a meagre share of around 15 per cent.

This is a clear indication of India's knitwear export status, what lies in the future for the industry as well as what needs to be done.

Australia, one of the world's largest wool exporting countries, believes that India, with the potential to manufacture and export more knitwear has much to do before it can come anywhere near China in manufacturing or exporting knitwear.

Talking to Business Standard, Simon Johnson, Regional Director, Western Australia Trade Office in India, said, "India is a major market for Australian wool. The imports of wool To India has increased 17 per cent and it is likely to sustain this growth. Last year Australia exported wool worth Australian $180 million ($152 million) to India which was an increase of around 17 per cent as compared to that in the previous year. However, if we compare it with China's, India is far behind in imports of wool. China imports 60 per cent of our total wool exports every year. The second comes Italy with around 20 to 25 per cent and India comes third with around 15 to 20 per cent imports per annum."

On the reasons Johnson said, "The need to import wool depends on how much you manufacture and export knitwear. China has bagged a major share in manufacturing knitwear and its exports so it requires more wool. The wool imported by China and India is mainly used in manufacturing knitwear which has a huge market in the US and European countries. China has tapped more of this market and India needs to do a lot to increase its production as well as exports. However, for Australia India still remains a growing market with substantial potential to grow."

On Italy he said, "Italy differs from India and China in the quality of wool they ask for. Almost all exports to Italy is of the finest quality of wool as they use it for manufacturing fine suits. Brands like Giorgio Armani ask for the finest wool from us. Yet Italy is the second largest export market for us and India comes third. However, we believe that the 17 per cent growth from India's imports will be sustained over the next few years. As the knitwear industry in India will grow then automatically Australian exports to India will also increase."

He said Australia considers India as one of the largest export market with potential for growth but it will have to increase its output of knitwear and its exports.

Michael Moingnard, Senior Trade Commissioner-South Asia, Australian Trade Commission, while speaking to Business Standard, said, "Our focus is on agri-exports to India as well as the Indian energy industry. There are many Australian firms interested in doing research and exploration in India especially in Gujarat in the oil and natural gases sector. We see an opportunity in exporting coal to India as its power sector is paused to grow tremendously in the next few years. The Indian power sector is expected to develop 200,000 Mw capacity by 2011 and they will require 70 mn tonnes of coal. We are looking at tapping this market."