Insight: Why India is the emerging bright light for wool

India traditionally takes a small portion of the Australian wool clip, but that could be about to change as a lifting of tariff adds impetus to demand.

Wool growers are hoping India may become a bigger player in the market as a lifting of tariff adds impetus to growing demand.

The fibre attracted a meagre 2.5 per cent tariff, but this was removed last week under the Australia-India Economic Cooperation and Trade Agreement.

And now wool growers are pinning their hopes that the lifting of the tariff might spark greater buyer interest from that country.

India was the second largest importer of Australian wool last season, taking 6.9 per cent of the national clip or 4.2 million kilograms, according to figures from the Australian Wool Exchange Ltd.

It still lags well behind China with 81.7 per cent or 49.8 million kilograms but the good news for industry was India‘s imports of Australian wool were up 68 per cent over the season before.

Macdonald and Co Woolbrokers director Don Macdonald said Indian interest had started to rise in the two months before the Christmas break.

“It is not only about the lifting of the tariff, but that doesn’t hurt,” Mr Macdonald said.

“For 20 years, there has been talk of the potential for India, but it just hasn’t happened.

“But it seems the time is right now, and there are some that are saying we could see India go from taking 4-7 per cent of wool exports to more than 10 per cent and become a major player.”

Mr Macdonald said there were only two or three top makers in India, and while in the past they had operated on buying to price, this trend was now changing to be about quality.

“We welcome extra competition, and by no means is Australia anti-China buying wool but it is good to have competition,” he said.

WoolProduers Australia president Steve Harrison said any agreement which lifted tariffs was welcome.

“This could prove to be a bonus for Australian growers that we now have freer access to such a big population that all need to be fed and clothed,” Mr Harrison said.

“Even if we could get wool worn by a small fraction of the Indian population, and even if it is as blends, then that would still be a win.

“Anything that creates more competition for Australian wool and takes away our reliance on one big market – regardless of how good that market has been – has to be a positive for the industry.”