DAVV, INDORE SESSION-2010-11

Presentation:-ROLE OF EXPORT PROMOTION COUNCIL IN LEATHER GARMENTS TO EUROPE MARKET

Roadmap
Introduction Leather industry - Overview - History -Structure of Indian Leather Industry Leather Garment Industry Export Promotion Council Institutions for Leather Industry Top 10 Leather Exporters Indias trade of leather all over the world Trade with Europe Initiatives taken by GOI FTP 2009-14 Future Opportunities Conclusion References

INTRODUCTION
The leather industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. India has the capacity to meet 15% of global demand for leather products. Export promotion council plays an important role in maintaining this percentage.

Indian Leather Industry Overview

Indian leather industry, the eighth largest foreign exchange earner for the country, with an export value of $2.1 billion provides employment to 2.5 million people. India's leather exports constitute about 2% of world trade. Nearly 60-65 per cent of leather production is in the small/cottage sector. Main emphasis is on its planned development, aimed at optimum utilization of available raw materials. The exports gained momentum during the past two decades from Rs.320 million in the year 1965-66 to Rs.69558 million in 1996-97. Today it has attained well merited recognition in international markets.

Policy initiatives taken by the Government of India since 1973 have been instrumental to such a transformation. Direct and indirect employment of the industry is around 2 million. The skilled and semi-skilled workers constitute nearly 50% of the total work force.

 Pre liberalisation period: The history of leather tanning in India dates back to 3000 BC. Tanning in the rural areas was done by indigenous techniques, making the use of this material easier. The most popular Indian leather products include footwear and hand bags. The footwear came in various designs of traditional embroidery, brocade or textile. Bright colors and unique designs are used. The all time favorite, Kolhapuri chappals of Maharashtra, are soft and very comfortable to wear. A special type of thickish shoes, called mojadis are designed in Rajasthan. Post liberalization Period: The Post liberalization Period opened up floodgates of opportunities for the Indian leather industry. With global players looking for new sourcing options (in addition to China), the country is uniquely positioned to gain a bigger share of the global market. Renowned brands from the US and Europe are planning to import leather and leather products from India. Global players who took part at the India International Leather Fair, 2005, consider India as the market to be in.

Jalandhar Delhi Agra Mumbai Ambathur Ranipet Chennai Vanyambadi

 Some of the important leather products exported by India include Leather Footwear Footwear Components (Shoe Uppers, Soles etc.) Leather Garments Leather Goods Harness & Saddlery Finished Leather

Leather Garment Industry

Leather garments form a significant segment of the Leather Industry in India. Leather garments production capacity is estimated to be 16 million pieces annually. India produces different types of leather garments i.e., jackets, long coats, waist coats/shirts, pant/shorts, motorbike jackets, industrial leather garments, leather aprons etc. India is the second largest producer of leather garments, next only to China, which produces 70 million pieces of the total global trade volume of about 120 million pieces .

Indias export of Leather Garments- country wise

LEATHER GARMENTS (Value in Million US$) COUNTRY 2007-08 GERMANY U.S.A. U.K. ITALY FRANCE HONG KONG SPAIN RUSSIA NETHERLANDS AUSTRALIA NEWZEALAND DENMARK GREECE 69.40 27.76 23.23 58.64 27.10 1.04 47.69 0.23 11.25 1.91 0.10 12.35 4.48 APR-MAR 2008-09 100.25 22.20 27.92 70.13 42.28 2.02 48.47 0.51 15.72 3.60 0.13 23.86 3.61 % share 2008-09 23.52% 5.21% 6.55% 16.46% 9.92% 0.47% 11.37% 0.12% 3.69% 0.85% 0.03% 5.60% 0.85%

April-march 2007-08 CANADA SWITZERLAND SWEDEN S. AFRICA AUSTRIA BELGIUM JAPAN PORTUGAL CHINA IRELAND U.A.E. INDONESIA KOREA REP. FINLAND SAUDI ARABIA 8.94 2.41 8.62 0.82 2.55 5.13 0.88 3.93 0.09 0.17 5.33 0.00 0.22 1.00 0.06 2008-09 7.86 3.92 7.96 0.44 4.30 7.45 1.18 4.19 0.05 0.00 4.13 0.00 0.13 1.05 0.10

%share 2008-09 1.85% 0.92% 1.87% 0.10% 1.01% 1.75% 0.28% 0.98% 0.01% 0.00% 0.97% 0.00% 0.03% 0.25% 0.02%

OTHERS TOTAL Source : DGCIS

20.02 345.34

22.70 426.15

5.33% 100.00%

Export Promotion Councils of India

The Export Promotion Councils are nonprofit organizations registered under the Indian Companies Act or the Societies Registration Act, as the case may be. They are supported by financial assistance from the Government of India.

Role
The main role of the EPCs is to project India's image abroad as a reliable supplier of high quality goods and services. In particular, the EPCs encourage and monitor the observance of international standards and specifications by exporters. The EPCs keep abreast of the trends and opportunities in international markets for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports.

Functions
To provide commercially useful information and assistance to their members in developing and increasing their exports To offer professional advice to their members in areas such as technology upgradation, quality and design improvement, standards and specifications, product development and innovation etc. To organise visits of delegations of its members abroad to explore overseas market opportunities. To organise participation in trade fairs, exhibitions and buyer-seller meets in India and abroad. To promote interaction between the exporting community and the Government both at the Central and State levels To build a statistical base and provide data on the exports and imports of the country, exports and imports of their members, as well as other relevant international trade data.

Top ten Indian leather exporters

Tata International Ltd. Florind Shoes Ltd. Punihani International Farida Shoes Ltd. Mirza Tanners Ltd. T. Abdul Wahid & Company Hindustan Lever Ltd. Super House Leather Ltd. RSL Industries Ltd. Presidency Kid Leather Ltd.

Tata International is the countrys largest exporter of leather garments and it's product range includes jackets, coats, skirts and trousers, handbags, wallets, cases, luggage and travel accessories. The Garment business unit creates chic and stylish leather garments for leading fashion houses like Zara, Escada, Mango, La Bella, Yuppie and it's major clients are spread across countries like Spain, Italy, Germany, France, Belgium, Japan, Canada, Sweden and Denmark. It has the capacity to produce 30,000 leather garments per month in every possible range, cut and style with the aid of world-class manufacturing processes, special sample lines and a design studio to meet customers requirements. All the leather products & accessories are elegant designs crafted from high-quality leather for style and absolute convenience. This BU is seeking exclusive fashion tie-ups with high end, niche fashion labels and is ready with dedicated production lines, to take this business to the next level of expertise and craftsmanship.

Institutions Related To Leather Industry

- LEATHER INDUSTRIES DEVELOPMENT CORPORATION (LIDCOM) -LEATHER GOODS MANUFACTURERS ASSOCIATION (LIGMA)-DHARAVI ENTIRE LEATHER GOODS TRADERS ASSOCIATION (DELTA)-MAHARASHTRA SMALL SCALE INDUSTRIES DEVELOPMENT CORPORATION (MSSIDC): -COUNCIL FOR LEATHER EXPORTS:

% Share of Leather Products in Export Performance (2008-09)

Export Scenario for the last 5 years

Indias Leather Trade With World Country-wise Export Performance

(2008-09)

EU COUNTRIES
Belgium Denmark France West Germany Greece Ireland

Marketing of leather and leather products in Germany & EU

The leather sector offers a good potential which Indian entrepreneurs can exploit in Germany and other EU markets. With a strong foothold that the Indian leather industry has had for long in these markets, and its advantage of raw material and labour resources, Indian leather exporters can, and should, mount a strength and potential. This has to be done against the background of the well-known salient features of the German market: The world's second largest import and export market A difficult buyers' market with hyper competition and high expectations A dynamic multi-faceted market with rapid technological development and innovations A market where a considerable amount of buying power is devoted to satisfying individual needs A market influenced by the rising average age of the population and low birth rate A market where environment awareness and eco-friendly production becomes more and more a pre-requisite for successful marketing of products

India - Denmark Leather Trade:

* Indias export of leather and leather products to Denmark has increased from US$ 17.60 million in 2002 to US$ 49.10 million in 2007-08, growing at a CAGR of 22.77%. * The major leather products exported from India to Denmark are footwear with a share of 35.52%, followed by leather goods 30.16% and leather garments 25.09%. * Presently India holds a share of 3.84% in Denmarks total leather products import trade.

Government Initiatives
Duty free import scheme Indian leather development programme IDLS The Additional Ambernath Export Promotion Leather Complex Zone. Focus Programme for Leather Products in Europe Facilitation of Members Participation in MIPEL Fair, Italy September 2009 Edition March 2010

FTP 2009-14
Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses, subject to payment of 50% of the applicable export duty. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector

Union budget 2009-10

Inclusion of new inputs for manufacturer exporters of leather garments, footwear (including non-leather footwear) and other leather products under the 3% Duty Free Import Scheme (DFIS) The 2% interest subvention scheme for certain labour intensive sectors including the leather sector has been extended from Sept. 30,2009 to March 31, 2010. This will facilitate reduced interest rates @ BPLR minus 4.5% for the leather sector on preshipment and post-shipment rupee export credit. Additional Benefits (coverage) under Export Credit Guarantee scheme have been extended till March 2010. As per current package of ECGC, the percentage of cover is enhanced by 5% under Export Credit Insurance Policies issued to exporters and by 10% under Export Credit Insurance Covers for Banks. Thus, the total coverage for the exporters will be 95% and for the banks to 85%. The Excise Duty Exemption is being extended to Ethylene Vinyl Acetate (EVA) compound manufactured by a job worker, for further use in the manufacture of footwear, on par with PVC Compound. Exemption of Service Tax on foreign agents commission and transport of goods through road. To facilitate flow of credit at reasonable rates, Rs.4,000 crore provided as special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank of India (SIDBI). This will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year

FUTURE OPPORTUNITIES Rising potential in the domestic market. Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products. Use of e-commerce in direct marketing.

FAIR CALENDAR FOR 2009-10

Delhi International Leather Fair Pragati Maidan New Delhi Oct 23-25, 2009 India International Leather Fair Chennai, India Jan. 31- Feb. 3, 2010 International Leather Goods Fair Kolkata , India Feb. 19-21, 2010

CONCLUSION
In rupee terms, during the first five months (April to August) of the current financial year 2009-10, export of Leather Garments has registered a marginal increase of 2.25% and non-leather footwear increased by 2.51%. However, in Rupee and Dollar terms, all leather product categories have recorded declining trend during the said period. Export of leather & leather products to major European countries and the USA have shown declining trend during the April to August 2009. With its rich resource base of raw hides, skins and human capital, Indian leather industry has the capability to increase its share in global leather trade. At present, Indian leather exports account for 3% of the global trade with USA, Germany, UK and Spain as major markets. The country has a lot of potential to increase its share in these markets by utilizing its unique advantage of economies of scale and the capability to produce niche products.

REFERENCES
www.exim.indiamart./com www.infodriveindia.com www.india profile.com www.tatainternational.com www.dgft.org http://www.leatherindia.org/