REQUEST FOR PROPOSALS (RFP)
Value Chain of Indigenous (Coarse) Wool in Nagaur and Bikaner Districts of Rajasthan and
Market Systems Assessment for same
Commissioned by: Urmul Khejadi Sansthan (UKS)
Supported by: Sir Ratan Tata Trust
1. Background and Rationale:
Sheep rearing has been an integral component of the livelihood systems of Rajasthan's dryland communities for centuries. Besides meat, sheep have traditionally provided wool, which once constituted an important supplementary source of income. However, over the last two decades, the economics of indigenous wool has undergone a significant transformation. Unlike fine apparel wool used in garments, the wool produced by indigenous breeds in Rajasthan is coarse in texture and is no longer preferred by the conventional textile industry. Increasing competition from imported fine wool, rapid expansion of synthetic fibres, changing consumer preferences, inadequate grading systems, fragmented markets and limited value addition have substantially reduced its commercial value.
Consequently, wool has gradually become a side product even waste and expense item of sheep rearing rather than a meaningful source of livelihood. In several parts of Rajasthan, sheep rearers often recover only the cost of shearing, while in some cases wool remains unsold or is disposed of at negligible prices. This decline has weakened incentives for better wool management and has reduced the overall economic potential of sheep-based livelihoods.
Paradoxically, while traditional textile demand has declined, the global search for sustainable, biodegradable and renewable natural materials has created entirely new opportunities for coarse wool. Across several countries, coarse wool is increasingly being used in thermal insulation, acoustic insulation, geo-textiles, erosion control, horticulture, packaging materials, composites, construction materials and other industrial applications. These emerging markets value the unique physical properties of coarse wool rather than its suitability for clothing.
This changing market landscape presents both a challenge and an opportunity. Rather than viewing coarse wool as an inferior textile fibre, there is a need to explore whether it can be repositioned as a valuable raw material for industrial and environmental applications. Urmul Khejadi Sansthan (UKS), with support from Sir Ratan Tata Trust, is implementing programme for strengthening sheep-based livelihoods in Nagaur district. As part of these efforts, UKS intends to commission a comprehensive Value Chain and Market Systems Assessment of indigenous coarse wool to identify practical, commercially viable and scalable opportunities that can improve producer incomes while creating sustainable demand for indigenous wool in Nagore and adjoining district of Bikaner.
2. Purpose of the Assignment
The purpose of this assignment is not merely to document the existing wool value chain which is already studied for the area. Rather, the study is expected to generate strategic evidence that can guide future investments, enterprise development and market interventions aimed at transforming indigenous coarse wool into an economically viable livelihood resource.
The assignment should identify opportunities to strengthen the producer-side value chain, improve efficiencies in collection and marketing, explore emerging industrial applications and recommend practical business models that can generate sustainable demand for indigenous wool while enhancing incomes of sheep-rearing households.
3.Structure of the Assignment
Recognising that the producer-side value chain and the industrial (non-fibre) market for coarse wool require different technical expertise, the assignment has been divided into two independent but complementary study segments.
Interested agencies may submit proposals for:
- Segment A only
- Segment B only
- Both Segment A and Segment B jointly
- Agencies applying for both segments should clearly demonstrate expertise relevant to each segment and submit separate technical approaches and separate financial proposals for each segment.
- UKS reserves the right to award the two segments either to a single agency or to different agencies depending upon the technical and financial merits of the proposals received.
4. Segment A – Producer-side Wool Value Chain Assessment:
This segment focuses on understanding the existing value chain from the point of wool production to its sale to processors or other buyers as a usable raw material. The objective is to identify opportunities for improving producer incomes through better production practices, shearing, compressing and collection systems, grading, market linkages and potential institutional arrangements.
The study is expected to examine the complete journey of wool beginning with sheep rearing and extending through shearing, cleaning, sorting, grading, aggregation, transportation, village-level collection systems, traders, mandis, processors and existing buyers.
Beyond documenting the chain, the consultant should analyse where value is created, where value is lost, how prices are determined, how margins are distributed among different actors and where interventions can significantly improve producer returns.
Particular attention should be given to understanding existing market inefficiencies, infrastructure gaps, information asymmetry, quality management systems, logistics and institutional arrangements that influence the competitiveness of indigenous wool.
The consultant should also assess the role that producer collectives, cooperatives, Farmer Producer Organisations (FPOs), social enterprises and private sector partnerships could play in strengthening the value chain.
5.Segment B – Industrial Applications and Market Development Study:
Unlike Segment A, which focuses on the existing producer-side value chain, Segment B is primarily concerned with identifying existing / growing / future demand for indigenous coarse wool through commercially viable non-textile applications.
This segment should not be treated as a conventional market survey. Instead, it should function as an innovation and market development study that identifies industries where coarse wool possesses functional advantages over synthetic or alternative natural materials.
The consultant should assess current and emerging opportunities in sectors such as thermal insulation, acoustic insulation, geo-textiles, erosion control, horticulture, nursery products, biodegradable packaging, construction materials, composites, automotive components and other industrial applications Recent research indicates use of wool mixed with dung used to make livestock roofing solutions.
The study should identify technology providers, product developers, manufacturers, research institutions, market size, competing materials, pricing structures and potential buyers, government outlook for the segment.
Where feasible, the consultant should recommend products that could realistically be developed in Rajasthan and indicate the investments, partnerships and technical capacities required for commercialisation.
6. Objectives of the Assignment:
The overall objective of the assignment is to identify practical, scalable and commercially viable opportunities for enhancing the economic value of indigenous coarse wool while improving the livelihoods of sheep-rearing households in the project area.
More specifically, the study is expected to:
6.1 Understand the Existing Wool Economy:
Develop a comprehensive understanding of the indigenous wool economy in the project area, including sheep production systems, wool production, current marketing practices, major actors, institutional arrangements and market dynamics.
6.2 Identify Constraints across the Value Chain:
Analyse technical, institutional, financial and market-related constraints that reduce the commercial value of indigenous wool. The study should identify where value is created, where it is lost, and why producers receive only a small proportion of the final value.
6.3 Assess Existing and Emerging Markets:
Examine both existing and potential markets for indigenous coarse wool, with particular emphasis on emerging industrial applications where coarse wool possesses comparative advantages over synthetic or alternative natural materials.
6.4 Identify Enterprise Opportunities:
Identify commercially viable enterprise opportunities for producer organisations, Farmer Producer Organisations (FPOs), cooperatives, women’s groups, rural entrepreneurs and private enterprises.
6.5 Recommend Strategic Investments:
Recommend investments, partnerships and institutional mechanisms that can strengthen the indigenous wool ecosystem and generate sustainable demand while improving producer incomes.
6.6 Develop an Actionable Roadmap:
Prepare a practical roadmap outlining short-term, medium-term and long-term interventions that can guide future programme investments by UKS and its partners.
7. Scope of Work:
The consultant shall undertake a comprehensive assessment covering the following broad areas. While the list below provides the expected scope, the consultant is encouraged to recommend additional analytical areas that may strengthen the overall quality of the study.
7.1 Segment A – Producer-side Wool Value Chain Assessment:
The consultant shall analyse the existing wool value chain from production to sale, identifying opportunities for improving efficiency, value addition and producer incomes.
The assessment should include, but not necessarily be limited to, the following aspects:
Sheep Production Systems:
The study should document existing sheep production systems in the project area, including breed composition, flock size, production practices, migratory and sedentary systems, wool production characteristics, seasonality and factors affecting wool quality.
Wool Harvesting and Primary Processing:
The consultant shall examine prevailing shearing practices, timing of shearing, quality of shearing, cleaning, sorting and grading practices, availability of equipment, skills and service providers, and their influence on the quality and marketability of wool.
Aggregation and Collection Systems:
The study should analyse how wool is aggregated at village level, existing collection mechanisms, storage facilities, transportation arrangements, transaction costs and opportunities for improving aggregation efficiency.
Market Structure and Value Chain Mapping:
The consultant shall map the complete value chain, identifying all key actors including producers, traders, commission agents, mandis, processors, wholesalers and institutional buyers. The study should estimate value addition, margins and price spread across different stages of the chain.
Price Discovery and Market Behaviour:
The study should examine how prices are determined, availability of market information, bargaining power of producers, seasonal fluctuations, quality-linked pricing mechanisms and factors influencing producer returns.
Institutional Ecosystem:
The consultant should assess the role of government departments, cooperatives, producer organisations, research institutions, NGOs and private enterprises in supporting the wool sector and identify opportunities for improved coordination.
Infrastructure Assessment:
The consultant should identify infrastructure gaps relating to shearing, grading, storage, transportation, processing and marketing, and assess investments required to strengthen the value chain.
Financial Viability:
The consultant shall analyse the economics of wool production and marketing, identifying interventions capable of improving profitability at producer level.
7.2 Segment B – Industrial Applications and Market Development:
Unlike Segment A, which primarily examines the existing value chain, this segment focuses on identifying future demand for indigenous coarse wool by exploring innovative industrial and commercial applications.
The study should investigate opportunities where the unique physical characteristics of coarse wool—including durability, insulation, moisture regulation, biodegradability and fire resistance—offer competitive advantages.
The consultant should specifically assess opportunities relating to potential markets in thermal insulation materials, acoustic insulation panels, biodegradable packaging materials, construction and green building materials, automotive and transport applications, and other innovative applications
identified during the study.
For each identified application, the consultant should assess:
- Present and projected market demand.
- Existing manufacturers and market leaders.
- Technology providers.
- Competing products and substitute materials.
- Potential buyers and distribution channels.
- Potential role of producer organisations and rural enterprises.
The consultant is expected to move beyond merely identifying products and should recommend realistic business models that could be piloted under the project.
7.3 Cross-cutting Analysis:
- Irrespective of the segment(s) undertaken, the study should integrate the following perspectives wherever relevant:
- Environmental sustainability and circular economy.
- Gender and women's participation in the wool economy.
- Inclusion of small and marginal sheep rearers.
- Role of producer institutions and community enterprises.
- Policy and regulatory environment.
- Opportunities for public-private partnerships.
- Scalability and long-term sustainability.
- International market opportunities and compliance requirements.
8. Suggested Methodology:
The consultant is expected to adopt a mixed-method approach combining quantitative analysis with qualitative enquiry. The methodology should be sufficiently rigorous to generate reliable evidence while remaining practical and field oriented.
The methodology should include a detailed review of secondary literature, policies, previous studies and market reports relating to indigenous wool, livestock production and industrial applications of natural fibres.
Primary research should include field visits to project villages, interviews with sheep rearers, wool traders, processors, manufacturers, research institutions, technology providers, industry associations, government departments and potential buyers.
The consultant should employ appropriate analytical frameworks such as value chain analysis, market systems development (MSD), end-market assessment, competitiveness analysis, cost-benefit analysis and business model assessment.
Where appropriate, exposure visits to successful wool enterprises or innovative product manufacturers outside Rajasthan may also be proposed.
The consultant should clearly describe the proposed sampling strategy, research tools, quality assurance mechanisms and validation processes.
9. Expected Deliverables (for both segments):
The selected consultant shall be responsible for delivering a comprehensive study that not only analyses the existing situation but also provides actionable recommendations for future investments and programme interventions. The emphasis should be on practical recommendations supported by evidence rather than descriptive documentation.
The following deliverables are expected under this assignment.
- Inception Report
- Draft Study Report
- Final Report
- Executive Summary
- Presentation
- Supporting Outputs
The consultant shall also submit:
- Complete datasets in editable format.
- List of stakeholders consulted.
- Value chain maps.
- Market maps.
- Photographic documentation (where appropriate).
- Case studies of successful enterprises.
- Copies of research tools used.
- Bibliography and reference material.
10. Indicative Timeline:
The study is expected to be completed within 16 weeks from the date of signing the contract.
11. Proposal Submission Guidelines:
Interested agencies shall submit both a Technical Proposal and a Financial Proposal and shall clearly mention whether the proposal is for Segment A or Segment B or it a complete proposal.
The Technical Proposal should demonstrate the agency's understanding of the assignment, proposed methodology, work plan, relevant experience, team composition and examples of similar assignments completed.
The Financial Proposal should provide a detailed cost estimate covering professional fees, travel, field investigations, workshops and all other assignment-related expenses.
12. Intellectual Property and Confidentiality:
All reports, datasets, photographs, maps, presentations and other outputs prepared under this assignment shall become the property of Urmul Khejadi Sansthan.
The consultant shall maintain confidentiality regarding all information obtained during the course of the assignment and shall not publish or disseminate any findings without prior written approval from UKS during or after the project is completed.