LEATHER INDUSTRY

Leather Sector
The Leather Industry holds a prominent place in the
Indian economy. It is among the top ten foreign
exchange earners for the country.

With an annual turnover of over US$ 7.5 bn, the
export of leather and leather products increased
manifold over the past decades and touched US$
4.86 bn in 2011-12, recording a cumulative annual
growth rate of about 8.22% (5 years).

Though India is the second largest producer of
footwear and leather garments in the world, India
accounts for a share of close to 3% in the global
leather import trade of US$ 137.96 billion (2010)




The major exporting countries of leather and leather
products are China, Italy, Hong Kong, Germany,
France, Belgium, India. Indias is the 7th largest
exporter of leather & leather products to the world.

China and Italy are the leading producing and
exporting nations in the world with exports worth
US$ 41.2 bn and US$ 17.7 bn respectively.

The leather industry is an employment intensive
sector, providing job to about 2.5 million people.
Women employment is predominant in leather
products sector with about 30% share.











% Share of Leather Products in Export
Performance (2011-12)

% share of various countries in Indias Leather &
Leather Products Exports (2011-12)

Major Markets:

The major markets for Indian Leather & Leather
Products are Germany 15.01%, UK 11.15%, Italy
10.85%, USA 9.02%, Hong Kong 7.38%, France
6.25%, Spain 6.08%, Netherlands 4.07%, Belgium
2.32%, China 2.54%, U.A.E.2.24%, Australia 1.39%.

These 12 countries together accounts for nearly 78.30%
of Indias total leather& leather products export.

Indias Export of Leather & Leather Products to the
European Union touched US$ 3116.52 mn in 2011-12,
accounting for a share of 64.01% in Indias total leather
export trade of US$ 4868.71 mn.

Export Scenario Last 5 Years

Major Production Centres of Leather and Leather
Products
Profile of Identified Clusters

Major export items of export from Kanpur Cluster
are finished leather (buffalo leather), leather
footwear (Safety Shoes) and harness & saddler.

In Chennai it is finished leather (Goat, Sheep and
Calf), leather footwear (fashion shoes), leather
goods and garments.

In Kolkata cluster major export items are leather
goods (bags, purses, wallets) and leather gloves.

Strengths of Indian leather sector
Supply Side
21% world cattle & buffalo and 11% of world goat and
sheep population.
Low cost skilled labor
Innovative technology, increasing industry compliance to
international environmental standards.
Support of the allied industries.


Demand Side
Large domestic market
Exporter-friendly government policies.
Tax incentives on machinery by Government.
Well-established linkages with buyers in EU and USA.


Weakness
Major part of it is unorganized and fragmented.
Unawareness of international standards by many
players as maximum number of leather industries
are SMEs.
level of labour productivity due to inadequate formal
training / unskilled labour
Limited scope for mobilizing funds through private
placements and public issues, as many businesses
are family-owned
Inefficient Supply Chain
Lack of negotiating power



THREATS

Entry of multinationals in domestic market.

Stiff competition from other countries.(There are at
least 5 countries viz, China, Indonesia, Thailand,
Vietnam and Brazil, which are more competitive
than India.)

Non- tariff barriers

Strict international standards.

Fast changing fashion trends

Leather prices 0.5-0.75 US $ per sq ft. more than
synthetics which are available in more colors and
texture


OPPORTUNITIES
Investment by large corporate
New Markets
New Trends

Government Support Measures
Leather sector is one of the Focus Sectors under
Foreign Trade Policy of the Govt. of India

Funding support provided towards export
promotion & market development activities.

Funding support provided towards technological
upgradation and modernization of production
units.

100% Foreign Direct Investment permitted
through automatic route.
Cont
Import of specified machinery for use in leather and
footwear industry allowed at a 5% concessional
import duty.

Duty free import of raw hides and skins, wet blue
chrome tanned leather, crust leather and finished
leather of all kinds including splits and sides thereof
and Duty free import of specified critical inputs for
manufacturers of leather garments and other leather
products including footwear.

Simplified import/export procedures quick customs
clearances.

Suggestions
Developing Infrastructure

Improving services of Support Institutions

Compliance to Environmental Regulations and Use of
Vegetable Tanning

Capacity Pooling and Collaborative approach to
Marketing

Brand Building

Working in clusters
Suggestions
Marketing
Fair and Trades
Leather Marketing Zone
Training Programmes for labour
Improving Infrastructure e.g.,
Calcutta Leather Complex
THANK YOU!!!