Indian Leather Industry Surging Ahead To Its Ambitious Goal

Indian Leather Industry Surging Ahead to its Ambitious Goal

by

Jim Martin

Manufacturing of Leather products has a presence in the Indian Subcontinent since times immemorial. Ancient civilizations used leather products like bags, harnesses, armour, scabbards, boots, and sandals etc. Patrons often hired artisans to manufacture leather products meeting their specific demands.

The Indian leather industry has undergone a sea of change post liberalization. Innumerable opportunities have opened up for

Indian manufacturers

. Global markets look at India as a preferred sourcing option. Indian leather and products meet the requirements of leading US brands and those of Europe Thus, Indian exporters seem to enjoy a larger share in the market globally.

The industry holds an important place in the country\’s economy today. With a turnover of approximately $5 million per annum, the leather industry also employs 2.5 million workers. The industry has changed phenomenally, over the years, to being an exporter of value-added leather products, while the country merely exported raw materials in 60\’s and 70\’s.

The transformation in Indian Leather Industry can be attributed to various reforms initiated by the government. The foresightedness of these initiatives paid the desirable results, with an emphasis on its planned development, aimed at maximum utilization of available raw material, maximizing returns, particularly from exports. Not only has the industry progressed to a significant place in the economy of India, but also it contributes significantly to the exports sector, with its presence among the 7 largest export-oriented industries earning foreign exchange.

The Government\’s stand on leather industry noticed a significant transition 1974 onwards, prioritizing exports of value-added products. Exporting raw and semi finished leather was banned from 1991, making room only for finished leather exports. Thence, Indian manufacturers set up factories after 1991-92, manufacturing shoe uppers, shoes, leather goods and leather garments. The import duties on capital goods were reduced as an incentive to Indian exporters.

The leather sector was kept reserved as small scale industry, preventing Foreign Direct Investment (FDI) in the industry. Between August 1991 and December 2005, the FDI on leather industry was $51.84 million.

The Indian leather sector meets 10% of global finished leather requirement. The different leather products manufactured in the country include footwear, leather garments, finished leather, leather goods, saddler & harness.

Footwear falls under a significant segment of the Indian leather industry. Being the second largest global producer of footwear after China, India accounts for 13% of global footwear production of 16 billion pairs. The country produces 2065 million pairs of various categories of footwear including leather shoe uppers and not-leather footwear, of which approximately 115 million pairs are exported. Thus, Indian suppliers take nearly 5% of its production to the offshore destinations.

The industry has experienced a significant rise in footwear exports, increasing from $82.56 million in 1979 to $507.51 million in 2009-10. Germany, UK, Italy, USA, France, Spain, Netherlands, Portugal, UAE, Denmark, Australia, Sweden, Canada, South Africa, Japan and others are major export destinations for Indian footwear with their respective share being 14.88%, 19.66%, 13.93%, 8.20%, 9.58%, 6.37%, 4.32%, 1.50%, 2.63%, 1.13%, 1.03%, 0.81%, 0.62%, 0.65%, 0.36%, 14.35%.

Leather garments too form a significant segment of Indian leather industry. India is the second largest producer of leather garments, next only to China. The country\’s production of leather garments is estimated to be 16 million pieces annually, with global trade volume being about 120 million pieces. Different types of leather garments produced included jackets, long coats, waist coats/shirts, pants/shorts, motorbike jackets, industrial leather garments, leather aprons etc. Indian leather garments have been making giant stride in the world of fashion too.

India exported leather garments worth $428.52 million in 2009-10. Exports of leather garments account for a share of 12.60% in India\’s total leather trade of $3400.97 million in 2009-10. Export of finished leather reached $625.54 million in 2009-10. Export of leather goods and accessories including gloves touched $756.02 million the same year. During 2009-10, India\’s export of Saddlery & Harness was US$ 83.39 million.

The leather industry is bound to grow to a greater extent on its ambitious goal of global markets, with an abundance of raw material and skillful workforce available.

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