Leather exports touch $6 bn in FY2013-14: Industry report

The Dollar Business Bureau Pegged at an overall market size worth about Rs 25,000 crore, India’s leather industry offers direct and indirect employment to almost 20 lakh people. And with an annual turnover worth over $10 bn, leather exports have increased manifold over the past decades thereby touching about $6 bn in 2013-14. However, a study by industry body Assocham titled ‘Leather and leather products sector in India: Strategy to facilitate export’ says, that factors such as financial constraints, high interest rates, lack of infrastructure facilities are some key challenges contributing in making the leather industries in India uncompetitive and impacting its growth. And then there are other reasons that play up in a big way too. The persisting Euro Zone crisis, cut throat completion from China and other South East Asian and neighbourhood countries, emergence of synthetic and textile winter garments as an alternate to leather garments, removal of anti-dumping duty on Chinese and Vietnamese leather footwear and the rising prices of chemicals/inputs needed by the leather industry are all acting as roadblocks to the sector. The industry body suggested some measures that can give a leg up to the sector. These include urging the government to cut down interest integrated supply chain infrastructure, production infrastructure and support facilities rate to reduce the overall expenditure and upgrade the existing infrastructure in leather clusters. It has further suggested that Government should review and revise the interest subvention scheme for all leather and leather products, establish a mechanism for smooth refunds of duty drawback, focus product schemes, VAT and Tax refund as well as provide SMEs and leather goods manufacturers’ opportunities to participate in international fairs and exhibitions. On the domestic front, Tamil Nadu has the highest share of about 35% in the total leather and leather products’ export from India as of 2012-13. About 42% of the registered factories in leather and leather products are in Tamil Nadu. However, growth of leather and leather products’ exports from Tamil Nadu declined by over 7% YoY from 17.6% in FY2012-13 to 10.5% in FY2013-14, as noted in the study by Assocham Economic Research Bureau (AERB). The state is also ranked third after Uttar Pradesh (UP) and West Bengal in per capita labour productivity worth about Rs 10 lakh, the study revealed. It is ranked third again in terms of per factory employment. On an average, each leather factory in the state offers employment opportunity to approximately 61 workers as against 101 in UP and 64 in West Bengal.  

This article was published on March 26, 2015.