In
view of its immense potential for employment, growth and exports, leather
industry occupies an important place in Indian economy. The sector is spread
across the formal as well as informal sectors and produces a comprehensive
range of products from raw hides to fashionable shoes. The industry consists
of firms in all capacities, including small artisans to major global
players. Specialized institutions have been setup to promote the overall
growth and performance of the industry. There has been an increasing
emphasis on the planned development of industry, which is aimed at optimum
utilization of available raw materials for maximizing the returns,
especially from exports. The country ranked first among major livestock holding nations in the world and thus has a rich endowment of raw materials in terms of the cattle population. It has the capacity to cater 10% of the global leather requirement. Export of leather and leather products during 2004-05 recorded an impressive growth at US$2,380 million, exceeding the target of US$2,284 million set by the Commerce Ministry.
Today, the sector is amongst top 8 export earners for the country and employs around 2.5 million people. A major part (about 60-65%) of the production is in the small / cottage sector. Endowed with 10% of the world raw material, the export of country constitutes about 2% of world trade.
History
The history of leather tanning in India dates back to 3000 BC. Tanning in the rural areas is done by indigenous techniques, making the use of this material easier.
The most popular Indian leather products include footwear and hand bags. The footwear comes in various designs of traditional embroidery, brocade or textile. Bright colors and unique designs are used. The all time favorite, kholapuri chappals of Maharashtra, are soft and very comfortable to wear. A special type of thickish shoes, called mojadis are designed in Rajasthan. They are decorated with silk, beads and metal embroidery. Jaipur is famous for its fancy and sophisticated footwear.
Bengal is famous for its handbags in batik style with cracks, bold curves, and traditional motifs. Being very ornamental, Kashmiri leather items are very popular among buyers the world across. The red leather embroidered with gold and silk is done in Madhya Pradesh. In Hoshiarpur (Punjab), appliqué work is made in colored leather pieces. Leather with silvery finish or metallic gold is done in Karnataka.
The post liberalization era has 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.
Indian Leather Exports – Some important Facts & Figures
- India is the largest livestock holding country - 21% large animals and 11% small animals
- A source for 10% world leather requirement
- About 2.50 million workforce (30% women)
- Annual production value is over U$ 4 billion
- Annual export value is over U$ 2 billion
- Export growth CAGR 8.20% (2000-04)
- Promising technology inflow and FDI
- High priority to occupational safety and work environment
- Compliance to environmental standards
- Immense potential for future growth (domestic as well as export)
- Leather Footwear
- Footwear Components (Shoe Uppers, Soles etc.)
- Leather Garments
- Leather Goods (Including Harness & Saddlery, Leather Gloves etc.)
- Finished Leather
Export of Leather & Leather Products from India During April – July -2006 Vis-A-Vis April – July - 2007
| (Value in Million Rs) | |||
| Category | April – July | April – July | % Variation |
| 2006 | 2007 | ||
| Finished Leather | 10723.76 | 9126.02 | -14.90% |
| Leather Footwear | 12923.24 | 13793.02 | 6.73% |
| Footwear Components | 3161.39 | 3959.72 | 25.25% |
| Leather Garments | 4419.47 | 3970.4 | -10.16% |
| Leather Goods | 10140.36 | 8956.96 | -11.67% |
| Saddlery & Harness | 1021.38 | 1361.52 | 33.30% |
| Non-Leather Footwear | 698.4 | 771.36 | 10.45% |
| Total | 43088 | 41939 | -2.67% |
| Source : DGCI & S | |||
| (Value in Million US$) | |||
| Category | April – July | April – July | % Variation |
| 2006 | 2007 | ||
| Finished Leather | 234.57 | 222.43 | -5.18% |
| Leather Footwear | 282.68 | 336.17 | 18.93% |
| Footwear Components | 69.15 | 96.51 | 39.56% |
| Leather Garments | 96.67 | 96.77 | 0.10% |
| Leather Goods | 221.81 | 218.31 | -1.58% |
| Saddlery & Harness | 22.34 | 33.18 | 48.53% |
| Non-Leather Footwear | 15.28 | 18.8 | 23.07% |
| Total | 942.49 | 1022.17 | 8.45% |
Country-wise Export of Leather & Leather Products
| Export of Leather & Leather Products During the Period April-July 2007 & April-July 2006 | ||||||||||||
| (Value in Million US$) | ||||||||||||
| Leather | Leather Footwear | Footwear Component | ||||||||||
| Country | April-July | % share | % change | April-July | % share | % change | April-July | % share | % change | |||
| 2006 | 2007 | 200700.00% | 2006 | 2007 | 2007 | 2006 | 2007 | 2007 | ||||
| Germany | 7.74 | 8.52 | 3.83% | 10.14% | 44.44 | 60 | 17.85% | 35.00% | 10.72 | 14.86 | 15.39% | 38.55% |
| USA | 4.08 | 2.28 | 1.02% | -44.15% | 37.75 | 37.7 | 11.22% | -0.13% | 0.27 | 1.45 | 1.50% | 432.63% |
| UK | 0.89 | 0.65 | 0.29% | -26.70% | 56.57 | 63.83 | 18.99% | 12.82% | 2.99 | 4.9 | 5.08% | 63.93% |
| Italy | 36.24 | 37.74 | 16.97% | 4.12% | 41.44 | 50.69 | 15.08% | 22.33% | 17.55 | 24.17 | 25.04% | 37.70% |
| France | 4.32 | 2.75 | 1.24% | -36.27% | 20.32 | 23.99 | 7.14% | 18.08% | 6.64 | 9.52 | 9.87% | 43.32% |
| Hong Kong | 93.4 | 74.43 | 33.46% | -20.31% | 0.44 | 0.96 | 0.29% | 117.92% | 0.25 | 0.12 | 0.12% | -52.52% |
| Spain | 7.45 | 8.92 | 4.01% | 19.64% | 13.92 | 12.9 | 3.84% | -7.35% | 4.9 | 5.1 | 5.28% | 4.00% |
| Russia | 2.57 | 3.91 | 1.76% | 51.87% | 0.42 | 0.68 | 0.20% | 61.60% | 0.27 | 0.78 | 0.81% | 189.33% |
| Netherlands | 1.99 | 1.91 | 0.86% | -3.61% | 12.09 | 20.16 | 6.00% | 66.77% | 0.83 | 1.29 | 1.34% | 55.22% |
| Australia | 0.44 | 0.62 | 0.28% | 40.55% | 3.24 | 2.1 | 0.62% | -35.17% | 0.21 | 1.01 | 1.05% | 378.08% |
| New Zealand | 0.16 | 0.11 | 0.05% | -33.68% | 0.99 | 0.13 | 0.04% | -86.45% | 0.89 | 0.19 | 0.20% | -78.58% |
| Denmakr | 0.04 | 0.41 | 0.18% | 807.79% | 4.23 | 5.86 | 1.74% | 38.59% | 0.03 | 0.16 | 0.16% | 499.26% |
| Greece | 0.18 | 0.23 | 0.10% | 28.48% | 2.45 | 1.72 | 0.51% | -29.68% | 0.07 | 0.2 | 0.21% | 189.23% |
| Canada | 0.36 | 0.4 | 0.18% | 807.79% | 4.23 | 5.86% | 1.74% | 38.59% | 0.03 | 0.16 | 0.16% | 499.26% |
| Switzerland | 0.01 | 0.04 | 0.18% | 12.52% | 2.71 | 2.21 | 0.66% | -18.54% | 0.7 | 0.74 | 0.76% | 5.37% |
| Sweden | 0 | 0.03 | 0.01% | 828.55% | 3.09 | 4.45 | 1.32% | 44.18% | 0 | 0.02 | 0.02% | 3967.04% |
| S. Africa | 6 | 5.44 | 2.44% | -9.43% | 4.27 | 2.95 | 0.88% | -30.99% | 0.79 | 0.22 | 0.23% | -72.27% |
| Austria | 0.14 | 0.22 | 10.00% | 54.04% | 2.34 | 2.54 | 0.76% | 8.60% | 0.6 | 2.34 | 2.43% | 291.03% |
| Belgium | 0.26 | 0.16 | 0.07% | -39.45% | 6.6 | 11.47 | 3.41% | 73.83% | 0.71 | 0.23 | 0.24% | -67.93% |
| Japan | 2.15 | 1.83 | 0.82% | -14.75% | 1.06 | 0.85 | 0.25% | -19.30% | 0.08 | 0.14 | 0.15% | 80.48% |
| Portugal | 2.75 | 3.03 | 1.36% | 10.24% | 6.24 | 4.4 | 1.31% | -29.51% | 5.67 | 5.23 | 5.42% | -7.78% |
| China | 13.27 | 15.82 | 7.11% | 19.21% | 0 | 0.58 | 0.17% | 132998.04% | 0.43 | 0.04 | 0.05% | -89.81% |
| Ireland | 0 | 0 | 0.00% | 0.00% | 0.56 | 1 | 0.30% | 77.31% | 0 | 0 | 0.00% | 0.00% |
| UAE | 0.56 | 1.84 | 0.83% | 227.78% | 6.76 | 8.48 | 2.52% | 25.48% | 1.86 | 0.28 | 0.29% | -84.71% |
| Indonesia | 2 | 4.47 | 2.01% | 124.17% | 0 | 0.02 | 0.01% | 0.00% | 0.83 | 0.31 | 0.32% | -62.845 |
| Korea Rep. | 11.95 | 7.77 | 3.49% | -35.00% | 0.1 | 0.07 | 0.02% | -28.08% | 0.02 | 0 | 0.00% | -100.00% |
| Finland | 0.2 | 0.1 | 0.05% | -49.44% | 0.71 | 0.79 | 0.23% | 10.60% | 0.01 | 0.84 | 0.87% | 11853.89% |
| Saudi Arabia | 0.09 | 0.02 | 0.01% | -80.47% | 1.38 | 1.19 | 0.35% | -13.85 | 0.43% | 0.54 | 0.56% | 24.77% |
| Others | 35.32 | 38.78 | 17.43% | 9.80% | 8.06 | 13.33 | 3.97% | 65.36% | 8.89 | 18.69 | 19.36% | 110.21% |
| Total | 234.57 | 222.43 | 100.00% | -5.18% | 282.68 | 336.17 | 100.00% | 18.93% | 69.15 | 96.51 | 100.00% | |
| 39.56% | ||||||||||||
| Source : DGCIS | ||||||||||||
Major Markets for India's Export of Leather Export of Leather Products (2000-01 to 2004-05)
| Country | 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 |
| USA | 342.78 | 286.89 | 246.44 | 251.58 | 279.7 |
| Germany | 307.17 | 304.46 | 272.53 | 329.82 | 336.69 |
| UK | 270.09 | 248.89 | 24096.00% | 250.65 | 299.21 |
| Italy | 241.07 | 263.11 | 25592.00% | 285.02 | 242.6 |
| Hong Kong | 98.32 | 121.43 | 16570.00% | 22697.00% | 236.52 |
Structure of Exports of Indian Leather Industry (2003-04)
India's Export of Leather & Leather Products – Products wise (2000-01 to 2004-05)
| (Value in Million US$) | |||||
| Category | April-March | ||||
| 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 | |
| Finished Leather | 381.49 | 459.25 | 50883.00% | 555.71 | 577 |
| Leather Footwear | 381.37 | 395.39 | 42330.00% | 553.04 | 601.73 |
| Footwear Components | 238.09 | 233.94 | 17507.00% | 16127.00% | 163.67 |
| Leather Garments | 460.45 | 378.75 | 27208.00% | 30108.00% | 318.73 |
| Leather Goods | 343.76 | 321.46 | 33536.00% | 40320.00% | 568.46 |
| Saddlery & Harness | 42.66 | 35.64 | 4366.00% | 5271.00% | 59.64 |
| Leather Gloves | 96.11 | 85.69 | 9004.00% | 13601.00% | |
| Non-Leather Footwear | 19.11 | 26.02 | 2688.00% | 5342.00% | 90.21 |
| Total | 1963.55 | 1936.14 | 187521.00% | 221645.00% | 2379.44 |
| Source – DGCI&S | |||||
Future Forecasts
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.
Several challenges, which hinder the export growth of the Indian leather industry, include - effluent management, non-tariff barriers, quality specifications and cost of compliance to various standards. However, there are ample opportunities to realize the export potential of this sector, with the adoption of suitable strategies.
The global leather industry is in the process of shifting its manufacturing base from developed to developing nations. This provides an opportunity for increased flow of foreign direct investment into India. In such a scenario, factors like abundance of leather, increasing awareness for quality, manufacturing know-how and designing capabilities, work in favor of India. Increasing presence of big corporate houses in this industry would help improve the investments required, and thereby the competitiveness in the international markets.