2:00 PM Indian Leather Industry Surging Ahead to its Ambitious Goal | |
Manufacturing of Leather products has a presence in the
Indian Subcontinent since times immemorial. Ancient civilizations used leather
products like bags, harnesses, armour, scabbards, boots, and sandals etc.
Patrons often hired artisans to manufacture leather products meeting their
specific demands. The Indian leather industry has undergone a sea of change
post liberalization. Innumerable opportunities have opened up for Indian manufacturers. Global markets
look at India as a preferred sourcing option.
Indian leather and products meet the requirements of leading US brands
and those of Europe Thus, Indian exporters seem to enjoy a larger share in the market
globally. The industry holds an important place in the country’s
economy today. With a turnover of approximately $5 million per annum, the
leather industry also employs 2.5 million workers. The industry has changed
phenomenally, over the years, to being an exporter of value-added leather
products, while the country merely exported raw materials in 60’s and 70’s. The transformation in Indian Leather Industry can be
attributed to various reforms initiated by the government. The foresightedness of these initiatives paid
the desirable results, with an emphasis on its planned development, aimed at
maximum utilization of available raw material, maximizing returns, particularly
from exports. Not only has the industry progressed to a significant place in
the economy of India, but also it contributes significantly to the exports
sector, with its presence among the 7 largest export-oriented industries
earning foreign exchange. The Government’s stand on leather industry noticed a
significant transition 1974 onwards, prioritizing exports of value-added
products. Exporting raw and semi finished leather was banned from 1991, making
room only for finished leather exports. Thence, Indian manufacturers set up
factories after 1991-92, manufacturing shoe uppers, shoes, leather goods and
leather garments. The import duties on capital goods were reduced as an
incentive to Indian exporters. The leather sector was kept reserved as small scale
industry, preventing Foreign Direct Investment (FDI) in the industry. Between
August 1991 and December 2005, the FDI on leather industry was $51.84 million. The Indian leather sector meets 10% of global finished
leather requirement. The different leather products manufactured in the country
include footwear, leather garments, finished leather, leather goods, saddlery
& harness. Footwear falls under a significant segment of the Indian
leather industry. Being the second largest global producer of footwear after
China, India accounts for 13% of global footwear production of 16 billion
pairs. The country produces 2065 million pairs of various categories of
footwear including leather shoe uppers and not-leather footwear, of which
approximately 115 million pairs are exported. Thus, Indian suppliers take nearly 5% of
its production to the offshore destinations. The industry has experienced a significant rise in
footwear exports, increasing from $82.56 million in 1979 to $507.51 million in
2009-10. Germany, UK, Italy, USA,
France, Spain, Netherlands, Portugal, UAE, Denmark, Australia, Sweden, Canada,
South Africa, Japan and others are major export destinations for Indian
footwear with their respective share being 14.88%, 19.66%, 13.93%, 8.20%,
9.58%, 6.37%, 4.32%, 1.50%, 2.63%, 1.13%, 1.03%, 0.81%, 0.62%, 0.65%, 0.36%, 14.35%.
Leather garments too form a significant segment
of Indian leather industry. India is the second largest producer of leather
garments, next only to China. The country’s production of leather garments is
estimated to be 16 million pieces annually, with global trade volume being
about 120 million pieces. Different types of leather garments produced included
jackets, long coats, waist coats/shirts, pants/shorts, motorbike jackets,
industrial leather garments, leather aprons etc. Indian leather garments have
been making giant stride in the world of fashion too. The leather industry is bound to grow to a greater extent
on its ambitious goal of global markets, with an abundance of raw material and
skillful workforce available. | |
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