Indian Looms Looming As Big Buyers Of Wool
Sydney Morning Herald
Tuesday December 8, 1998
Australian woolgrowers want their product on the backs of a new generation of Indian bridegrooms in order to cut the vast wool stockpile.
With demand flat in major markets like China, Russia and Korea, the Indian tradition of giving a suit-length of woollen fabric to bridegrooms and all male members of the groom's family provides a glimmer of hope for the troubled producers.
"India is a fast-growing market for wool, because its textiles industry is expanding output," New Delhi-based Australian diplomat Mr Tony Huber said.
Wool is about to become the first industry to benefit from Canberra's decision to lift a ban on ministerial and senior officials' visits to India, imposed after New Delhi tested nuclear weapons in May this year.
On Sunday, two senior officials - Mr Michael Titge of the Department of Foreign Affairs and Trade, and Mr David Navin of Agriculture, Forestry and Fisheries - arrived in Mumbai (Bombay), where they met industry leaders.
Today they are scheduled to visit New Delhi for meetings with officials in the departments of Finance, Commerce, Textiles and Agriculture, where possible cuts in Indian tariffs of up to 53 per cent on imported wool are on the agenda.
Federal Health Minister Dr Michael Wooldridge was to have been the first Australian minister to visit after the ban was lifted but cancelled his trip due to urgent parliamentary business.
Australia claims India's own expanding textile industry would benefit from a cut in tariffs, officials said.
The industry needs investment to retool but foreign investors are reluctant to put money in unless they can use high-quality imported wool to manufacture garments and sell them at competitive prices in the domestic market.
Exporters of woollen apparel items already receive full drawback on duty charged on raw materials they import, including wool, limiting the revenue benefits of the tariffs. Domestic producers receive no drawback, increasing the cost of items to the Indian consumer.
In 1997-98, Australia sold $175 million worth of wool to India, up more than 20 per cent on the previous year.
Most of the imported wool is used in the garments industry but some goes into manufacturing carpets.
Indian farmers produce only half the country's wool needs and the Ministry of Textiles supports cutting tariffs to between 5 and 10 per cent on greasy wool, from 25 per cent.
© 1998 Sydney Morning Herald