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Potential of the Leather Industry in India

In this article, we discuss the growth and potential of India’s leather industry along with its economic importance.

The leather industry has been one of India’s traditional industries and is indispensably located in certain states. The Indian leather industry and its evolution has enormous potential for job creation, product development, and exports. It is one of the top eight foreign exchange earners, earning more than INR 10,000 crore per year and accounts for 3% of the worldwide leather-related trade at INR 3,87,200 crores. In the UK and US, around 15% of total purchases of prominent worldwide brands in footwear, clothing, leather products, and accessories are made, and 10% of global supply is obtained from India.

Leather manufacturing in India has seen a dramatic metamorphosis in recent years, transitioning from a raw material exporter in the 1960s to a value-added finished product exporter in the 1990s. There are structured and unorganised segments in the Indian leather industry. The organised manufacturing industry includes tanning and dressing of leather and the production of luggage, purses, saddlery, harness, and footwear. Currently, the unorganised sector commands a dominating position in total production.

The small-scale, cottage, and artisan sectors account for more than 75% of total output, with the majority of these falling within the unorganised sector. Though large and minor sectors manufacture footwear, the minor sector accounts for more than 90% of overall footwear manufacturing in India. Indian leather industry and leather product exports increased at a 6.80% annual pace from FY 1991–92 to FY 2007–08. The UK, US, Germany, Italy, and Hong Kong are primary export destinations. India’s finished leather exports climbed at a 6.42% annual pace from FY 1993–94 to FY 2007–08.

The leather industry is important to the Indian economy. This industry is well-known for its consistent high export revenues, and it is one of the country’s top 10 foreign exchange earners. With an annual turnover of more than USD 12 billion, the export of leather and leather goods has grown exponentially over the previous decades, reaching USD 6.5 billion in 2014–15, representing a cumulative annual growth rate of almost 13.10% (5 years).

The Indian leather industry has an abundance of raw materials as India has 21% of the world’s cow and buffalo population and 11% of the world’s sheep and goat population.  Added to this are the advantages of trained labour, cutting-edge technology, increased industrial compliance with international environmental standards, and the unwavering backing of associated industries. 

The leather industry is a high-employment sector, employing around 2.5 million people, most of whom come from lower-income families. Women make up around 30% of the workforce in the leather products business. The leather industry operates in the following segments:

  • Tanning industry 
  • Footwear 
  • Leather garments

Achievements to Date

The Indian leather industry’s achievements include:

  • The Indian Footwear, Leather & Accessories Development Programme (IFLADP), a particular package for creating jobs in the leather and footwear sectors, was launched in December 2017.
  • USD 371 million has been authorised for this purpose from 2017–18 to 2019–20. The programme has authorised four projects totalling USD 15 million.
  • This will aid in infrastructural enhancements, job creation, and environmental sustainability in Tamil Nadu.
  • The massive West Bengal leather business has been granted preferential treatment, with the potential for over 7,000 jobs and an investment of up to USD 64 million.
  • Around nine projects for upgrading common wastewater treatment facilities have been approved and are now being completed under the plan, with an estimated value of USD 67 million and government funding of USD 46 million.
  • 94,231 unemployed persons in the leather and footwear sector received primary skill development training in the 2017–18 fiscal year, with 71,125 being placed.

Conclusion

India holds for about 13% of the entire world’s population for leather production and footwear and leather production. India’s leather contribution is less than 1% of India’s GDP, and the footwear industry contributes around 2% of revenue. Moreover, the Indian leather industry has a long way to go with enormous potential.

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Which Indian city is well-known for its leather?

Ans : India’s largest leather and leather product manufacturing centres are found in the followin...Read full

Who is India’s largest leather producer?

Ans : Tamil Nadu, India’s largest leather-producing state, accounts for 40% of the total leather ...Read full

What is the future of the Indian leather industry?

Ans : India’s leather sector has one of the youngest workforces, with 55% under the age of 35. Th...Read full

Is leather imported into India?

Ans : India imported leather and leather goods valued at roughly INR 42 billion in fiscal 2021. Thi...Read full