Leather Industry of India

1. Leather Industry of India By Bhumit Patel Nirav Patel

2. Introduction • Leather is one of the most widely-traded commodities globally. The growth in demand is driven by the fashion industry, especially footwear, furniture and interior design, and the automotive industry, among others. • Indian Leather Industry is the 6th largest in the world. • It employs 2.5 million people. The export of leather and leather products increased manifold over the past decades and was expected to be € 5.27 billion in 2013-14.

3. Overview • India's leather industry has witnessed robust growth, transforming from a mere raw material supplier to a value-added product exporter. In fact, today, almost 50 per cent of India's leather business comes from international trade. • The major markets for Indian leather products are Germany, Italy, the UK, the US, Hong Kong, Spain, France, the Netherlands, the UAE, Portugal and Belgium. • For the period 2007-08 to 2011-12, India's leather exports grew at a rate of 8.2 per cent, reaching US$ 4.86 billion in 2011-12. • Finished leather registered export revenues of US$ 1,023.21 million in 2011-12, witnessing an increase of 21.6 per cent over exports in 2010-11.

4. Council for Leather Exports • The Council for Leather Exports (CLE) is an autonomous, non-profit organization, which is entrusted with export promotion activities and development of the Indian leather industry. About 2,400 that manufacture/ export leather and leather products are members of the Council.

5. Industry - Structure • Leather product / leather industry in India is spread over organized as well as unorganized sector dominated by the presence of family units. The small scale, cottage and artisan sectors account for over 90% of the total production.

6. Distinguished Features • Own raw material source - 21% of world cattle & buffalo and 11% of world goat & sheep population are housed in India. • 2 Billion sq. feet of leather produced annually. • 2nd largest producer of Footwear and Leather Garments. • 3rd largest producer of saddlery and harness items. • Generating employment for 2.5 Million people, mostly from the weaker sections with 30% women predominance. • Nearly 60-65% of the production is in the small / micro sector.

7. Indian Leather Industry in Global Market • Indian leather industry today has attained well-merited recognition in the international market besides occupying a place of pride within the domestic market. • India accounts for 6% of the global market in leather goods and 2.78% of the World Import of Leather and Leather Products. • India’s export of leather and leather products increased from €1618.01 Million in 2003-04 to €2627.01 Million in 2008-09 registering a phenomenal growth rate of 10.17%. • India is the 5th largest exporter of Leather goods and accessories in the World with a lion’s share of 24.27% in the country’s export of Leather & Leather Products.

8. Country Wise Share in Total Leather & Leather Products Exports • Italy is the second largest market in the world for Indian leather products with a share of 12.82 %. In addition to this, Germany ( with 14.12%), U.K.(11.48%), USA (9.98%),Hong Kong (6.61%), Spain (6.09%), France (6.14%), Netherlands (4.13%), UAE (2.38%) and Australia (1.55%) comprise 75.30% of India’s total leather products export

9. Product Wise Contribution in India’s Export Basket

10. International Brands Outsourced from India

11. Leading Brands Available in Domestic Market

12. Leather Industry Division Leather Industry Leather Processing Leather Product Tanning & Finishing Footwear & Footwear Components Leather Garments Leather Goods

13. Government Initiatives Policy initiatives taken by the Government of India since 1973 have been instrumental in the dramatic transformation of the leather industry during sixties to nineties. • The entire leather sector is now de-licensed and de-reserved, paving the way for expansion on modern lines with state of the art machinery and equipment. • Zero Duty on the import of all type of raw materials, embellishments and components, concessional duty on import of specified machinery, liberal import-export of consumer products and components have been introduced

14. ILDP- Indian Leather Development Programme The Government assigned Euro 92.38 Million for Integrated Development of Leather Sector (IDLS) Scheme and Euro 130.78 Million for various sub - schemes under ILDP for infrastructure strengthening in the leather sector. The sub schemes include: ‘Establishment of Parks’, ’Design Studios’, ’HRD’, ’Intechmart Scheme’ .

15. SWOT Analysis

16. S Strength Uniqueness of Leather Strength Fashion Choice Strength Fine Quality of Skins Strength Easily Accessible Raw Material Strength Policy Support from the Government Strength Abundance of Human Resource

17. W Weaknesses Traditional Processing Technology Weaknesses Pollution Problem Weaknesses Widely Dispersed Units Weaknesses Poor Database Weaknesses Dependence on Imported Machines and Components Weaknesses Insufficient Enterprising Attitude of the Industry

18. O Opportunities Preference for Indian Leather –The Goodwill factor Opportunities Incentive from the Government Opportunities Opulence of Synthetic Support Materials Opportunities Advances in Modern Biology, Genetics, Chemical Engineering, Computers and Electro polymer Science

19. T Threats Inelastic Supply of Raw Material Threats High Price of Leather & Leather products Threats Liability Aspects of Pollution Threats Perpetual Dependence on Western Market Threats Rising Aggressive Competition from International Players Threats Challenges from Synthetics

20. Recommendations • Animal Banks- Up gradation of the raw material and other related items warrant animal husbandry should be made into an independent industry by forming animal banks. • Non- Conventional Raw Materials Alternative sources of raw materials, viz from other animals, e.g. camels, mules, donkeys and horses should be exploited • 2-3 Tier System of Leather Technology- Adoption of multi layered system of operation may contribute towards improvement of the quality of the end-product • Industrial Estates-Formation of Clusters would enable the industry to make the effluent treatment process more organized and seamless. • Base Shift to Coastal Area- Proximity of the production unit to the coastal area would ease procurement of water and the disposal of effluent.

21. Recommendations • Auxiliaries within the country- Much of the expenses could be pruned by using the auxiliaries required for fashionable leather products within the country. • Manufacturing Machines- Foreign Collaboration should be sought to manufacture machines for the leather and leather products. • Technical Training- The workers in the leather plants are required to undergo exhaustive training process so that they are equipped to operate in an advanced environment • Market Knowledge-Industry should be well versed with any latest development in the Leather World through active interaction and participation in International Expositions and Conferences • R & D – R&D should be constantly up graded to be at par with the global village.

22. Thank You