Identifying markets and developing export promotion strategy for woolen textiles from India

Abstract

The woollen textile industry in India is an industry in the MSME sector with a few key players but having huge export potential mainly attributed to the abundance of availability of raw material. India is one of the leading producers of wool and woolen products in the world and it is estimated to be the seventh-largest producer of wool in the world. The present paper uses yearly and monthly data of exports of woollen products from India from 2008-2018 collected from UN-COMTRADE to forecast exports from 2016-2022. The paper based on Revealed Comparative Advantage and Export Intensity Index narrows down on top 9 countries where India has a potential for increasing its exports.An attempt has been made to identify the markets using ARIMA Model to forecast the future destinations for woolen exporters. Before applying ARIMA, it is necessary to check the stationarity of the series being forecasted. The paper indicates that the thrust countries of India's exports of woollen textiles are Australia, Bahrain, Brazil, Saudi Arabia, Senegal, South Africa, Senegal and United Arab Emirates. It is found that projected woollen textile exports from 2018-2022 are constant in case of Australia, Bahrain, Brazil and Senegal but rising at an increasing rate for Saudi Arabia, Sri Lanka, South Africa and United Arab Emirates. Thus, this indicates that India needs to gain more competitive advantage to diversify and grow in the identified markets for export and further to enter new markets of various other countries and increase its level of exports in the future. For enhancing exports of woollen textiles from India, it is suggested that, policy makers as well as exporters of Woollen products from India need to work in sync to achieve the objective of export promotion to the identified thrust markets. Favourable terms should be negotiated to meet the non-tariff barriers in the identified export destinations. Initiatives need to be taken to reduce the cost of production, increase manufacturing capacity and integrate the fragmented supply chain.