Future of India's Leather Industry - Road To Glory

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Leather is a substance made by tanning animal rawhide and hides. Cattle hide is the most common raw material. It can be manufactured on a variety of scales, ranging from artisan to modern industrial. According to Wikipedia, the first mention of leather objects dates back to 2200 BCE.

Since the last quarter of the twentieth century, many cheaper and alternative natural leather fabrics have been invented and used as accessory or footwear making materials. Many of these newcomer materials - such as faux leather or vegan leather, are synthetic and non-biodegradable. In terms of backdrops, global environmental awareness has developed their use, resulting in the reintroduction of natural leather as a much more environmentally sustainable alternative.

India’s Leather Industry - Current Scenario

India's leather industry produces about 12.9 percent of the world's animal hides/skins and manages a significant annual production of around 3 billion square feet of leather. The country is responsible for 9% of global footwear output. The industry is known for consistently strong export earnings and is one of the country's top ten foreign exchange-earners. With access to 20% of the world's cattle and buffalo, as well as 11% of the world's goat and sheep population, India has an abundance of raw materials.

In comparison with major countries like China and Pakistan, the main markets for Indian leather and leather goods are the United States (17.22 percent), Germany (11.98%), the United Kingdom (10.43 percent), Italy (6.33 percent), France (5.94 percent), Spain (5.01 percent), the Netherlands (3.52 percent), the United Arab Emirates (3.35 percent), China (2.61 percent), Hong Kong (2.15 percent), Belgium (2.21 percent), and Poland (2.11 percent).

India’s export of Leather Products for the period April – August 19 – 20 touched USD 2276.39 Million. The figure could have been higher, but due to the CoVID-19 breakout in 2020’s second quarter, the international market faced huge trouble. It affected the leather export market of India.


India’s Leather Industry - Future Prospects

Usage of natural leather in manufacturing a variety of leather products has a strong upward trend day by day, contributing to its eco-friendly and cost-effective nature.

As previously mentioned, leather has the overall potential of being the most eco-friendly and bio-degradable material, but it is slightly more expensive than other low-cost synthetic materials. The leather industry and its products have been challenged by a significant problem. At the same time, although domestic consumption of leather-made products has marginally decreased, procurement and sales have increased due to increased demand in international markets. In the last ten years, the export quantity and potential of leather-made goods had a growth of more than three times than earlier valuation.

As per some reports, India exports of leather products are expected to trend around 346 Million USD in 2022 and 360 Million USD in 2023.  To meet the expected trend, some major initiative has been taken by Indian Government to revamp leather production and export which can drive the expected revenue to the Indian economy. A scheme named ‘Indian Footwear, Leather, and Accessories Development Program’ is being implemented from 2019-20 with an approved expenditure of 500 Crores. The scheme aims to improve infrastructure for the leather industry, resolve environmental issues related to the leather industry, and enable additional investments, job creation, and production growth. The rates of tax or GST rates have been decreased too so that manufacturers can offer better rates to their vendors from different countries. The interest equalisation rate on pre-shipment and post-shipment rupee export credit has been increased from 3% to 5% for Micro, Small, and Medium Enterprises units.

All these government initiative focuses on developing opportunities for the leather industry in India. Leather products such as handbags, boots, and leather garments have the highest potential for export growth in the leather industry. Joint ventures and foreign direct investment will help the Indian leather industry. It has been able to cope comfortably with global growth. The government's assistance is invaluable. The Indian Leather Industry appears to have a promising future in the coming years.

Published On: Sep 04, 2021