Note on Indian Leather & Leather Products Industry

Introduction:

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.

With an annual turnover of over US$ 7 billion, the export of leather and leather products increased manifold over the past decades and touched US$ 3.59 billion in 2008-09, recording a cumulative annual growth rate of about 9.58%.

The Leather industry is bestowed with an affluence of raw materials as India is endowed with 21% 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 2.5 million people, mostly from the weaker sections of the society. Women employment is predominant in leather products sector with about 30% share.

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$ 127 billion (2007).

The major production centers for leather and leather products are located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul ; West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra & Noida ; Maharashtra – Mumbai ; Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh - Hyderabad ; Haryana  - Ambala, Gurgaon, Panchkula and Karnal; Delhi

Product-wise Brands sourced from India:

Besides, major brands are sourced from India, MNC brands are sold in India and Indian brands sold in India.

Footwear

• India’s export of leather footwear had increased from US$ 553.04 million in 2003-04 to US$ 1243.78 million in 2008-09.
• India’s export of footwear components had increased from US$ 161.27 million in 2003-04 to US$ 246.35 million in 2008-09
• India’s export of non-leather footwear has increased from US$ 53.42 million in 2003-04 to US$ 43.53 million in 2008-09
• India’s export of footwear (leather, non-leather & footwear components) had increased from US$ 767.73 million in 2003-04 to US$ 1533.66 million in 2008-09, growing at a CAGR of 13.91%

 Leather Garments

• India’s export of leather garments had increased from US$ 301.08 million in 2003-04 to US$ 426.15 million in 2008-09

 Leather Goods & Accessories

• India’s export of leather goods & accessories had increased from US$ 539.21 million in 2003-04 to US$ 873.30 million in 2008-09

 Saddlery & Harness

• India’s export of saddlery & harness had increased from US$ 52.71 million in 2003-04 to         US$ 92.15 million in 2008-09

 India’s export of leather and leather products for six years

Export Scenario for the last 5 Years

India’s Leather & Leather Products Export Basket (2008-09)

Country-wise share in Total Leather & Leather Products Exports (2008-09)

 Major Markets:

The major markets for Indian leather products are Germany with a share of 14.12%, Italy 12.82%, UK 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%. These 10 countries together accounts for nearly 75.30% of India’s total leather products export.

Future Outlook:

Export projections for 2009-10 to 2013-14 are given below:
                                             (Value in Million US$)

The Government of India had identified the Leather Sector as a Focus Sector in its Foreign Trade Policy 2004-09 in view of its immense potential for export growth prospects 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, the Indian leather industry aimed to augment the production, thereby enhance export to US$ 7.03 billion by 2013-14, and resultantly create additional employment opportunities for overall one million people.