INDIAN LEATHER INDUSTRY

INDIAN LEATHER INDUSTRY

% Share of Leather & Leather Products (2017-18)

Indian Leather Industry – Overview, Export Performance and Prospects

• The Leather Industry holds a prominent place in the Indian economy. This sector is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the Country.
• The export of footwear, leather and leather products from India reached a value of US$ 5.74 billion during 2017-18.
• The leather industry is bestowed with an affluence of raw materials as India is endowed with 20% of world cattle & buffalo and 11% of world goat & sheep population. Added to this are the strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and the dedicated support of the allied industries.
• The leather industry is an employment intensive sector, providing job to about 4.42 million people, mostly from the weaker sections of the society. Women employment is predominant in leather products sector with about 30% share.
• India is the second largest producer of footwear and leather garments in the world.
• India is the second largest exporter of leather garments and third largest exporter of Saddlery & Harness in the world.
• The major production centers for footwear, leather and leather products in India are located in the States of  Tamil Nadu– Chennai, Ambur, Ranipet, Vaniyambadi, Vellore, Pernambut, Trichy, Dindigul and Erode ; West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra, Noida, Saharanpur; Maharashtra – Mumbai ;  Punjab – Jalandhar ; Karnataka – Bengaluru ; Telengana Hyderabad ; Haryana  – Ambala, Gurgaon, Panchkula, Karnal and Faridabad; Delhi; Madhya Pradesh – Dewas ; Kerala – Kozhikode and Ernakulam / Cochin ; Rajasthan; Jaipur ; Jammu & Kashmir; Srinagar.

 Strengths of Indian leather sector 

• Own raw material source – About 3 billion sq ft of leather produced annually
• Some varieties of goat / calf / sheep skins command premium position
• Strong and eco-sustainable tanning base
• Modernized manufacturing units
• Trained / skilled manpower at competitive wage levels
• World-class institutional support for Design & Product Development, HRD and R & D.
• Presence of support industries like leather chemicals and finishing auxiliaries
• Presence in major markets – Long Europe experience
• Strategic location in the Asian landmass

Emerging strengths 

• Design development initiatives by institutions and individuals
• Continuous modernization and technology up-gradation
• Economic size of manufacturing units
• Constant human resource development programme to enhance productivity
• Increasing use of quality components
• Shorter prototype development time
• Delivery compliance
• Growing domestic market for footwear and leather articles

 Highlights of Leather Product Segments:

• Tanning Sector –Annual production about 3 billion sq.ft. Accounts for 10% of world leather requirement. Indian colors continuously being selected at the MODEUROPE Congress
• Footwear Sector– Second largest footwear producer after China. Annual Production 2257 million pairs. Huge domestic retail market;  2021 million pairs are sold in domestic market. Footwear (leather and non-leather) export accounts for about 43.5% share in India’s total leather & leather products export. The Footwear products mix; Gents 58%, Ladies  30% ,Children 9% and others 3%
• Leather Garments Sector –  Second largest producer and second largest global exporter. Accounts for 9% share of India’s total export from leather sector.
• Leather Goods & Accessories Sector including Saddlery & Harness– Fifth largest global exporter. Accounts for about 24% share of India’s total export.

India’s export of Leather and Leather products for Five years 

                                                                  Value in US$ Mn

% Share of Leather & Leather Products (2017-18)

Major Markets: 

1. The major markets for Indian Leather & Leather Products are USA with a share of 14.76%, Germany 11.92%, UK 10.74%, Italy 6.78%,France 5.69% Spain 4.90%,Hong Kong 4.32%, Netherlands 3.43%,China 2.97%, UAE 2.81%, Poland 2.52%,and Belgium 2.00%.
2. These 12 countries together accounts for nearly 73% of India’s total leather & leather products export.

 European Union accounts for 54.49% of India’s total export of leather and leather products.  

 India’s Export of leather & leather products to different countries – 5 years

                                                                                              (Value in million USD)

Source: DGCI&S

Region-wise export of Leather & Leather Products 2016-17

Source : CLE Membership records

 Future Outlook:

The Government of India had identified the Leather Sector as a Focus Sector under ‘Make in India’ programme keeping in view of its immense potential for growth and employment generation. Accordingly, the Government is also implementing various Special Focus Initiatives under the Foreign Trade Policy for the growth of leather sector. With the implementation of various industrial developmental programmes as well as export promotional activities; and keeping in view the past performance, and industry’s inherent strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and dedicated support of the allied industries, the Indian leather industry aims to augment the production, thereby enhance export, and resultantly create additional employment opportunities.

Analysis – Export Performance of Leather and Leather Products during April-March 2017-18 vis-a-vis April-March 2016-17

a. Introduction:

As per officially notified DGCI& S monthly export data, the export of Leather and Leather products for the period April- March 2017-18 touched US$ 5739.93 mn as against the performance of US$ 5646.79 mn in April- March 2016-17, recording a positive growth 1.65%. In rupee terms, the export touched Rs.369966.47 mn in April- March 2017-18 as against Rs.378741.83 mn in April-March 2016-17, registering a decline of -2.32%.

b. Product Wise Analysis

Source : DGCI &S

Source : DGCI &S

• Footwear holds the major share of 49.23% in the total export of leather and leather products.

• Except finished leather, leather garments and non leather footwear other product categories have shown positive growth.

c. Country-wise analysis

Statement showing Export of Leather & Leather Products to different countries during April-Mar 2017-18 vis-à-vis April-Mar 2016-17 is given below:

 d. Major Export Destinations of India – Apr – Mar 2017-18

(Value in Million US$)

3. The major markets for Indian Leather & Leather Products are USA with a share of 14.76%, Germany 11.92%, UK 10.74%, Italy 6.78%, France 5.69%, Spain 4.90%, Hong Kong 4.32%, Netherlands 3.43%, China 3.09%, U.A.E. 2.81%, Poland 2.52% and Belgium 2.00%.
4. These 12 countries together accounts for nearly 72.84% of India’s total leather& leather products export.
5. Export of leather & leather products to major markets like USA, Spain, Hong Kong, China, UAE etc., have shown negative growth during April-March 2017-18.

e. Conclusion:-

• India’s export of Leather and Leather products for the financial year April-March 2017-18 touched US$ 5739.93 mn as against the performance of US$ 5646.79 mn in the corresponding period of last year, recording a positive growth of 1.65%.
• Export of different categories of Footwear holds a major share of about 49.23% in India’s total leather & leather Products exports with an export value of US$ 2825.53 mn. This is followed by Leather Goods & Accessories with a share of 23.79%, Finished Leather 15.23%, Leather Garments 9.04% and Saddlery & Harness 2.72%.
• Except Finished Leather, Leather Garments and non leather footwear other product categories have shown positive growth.

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