Leather exports are likely to clock 5-6 per cent growth (in rupee terms) in the fiscal year ending March 31, 2019, over the ₹37,000 crore that the industry reported the previous year.

“Till November, the industry’s performance has been good, and we hope that the trend will continue till March,” said PR Aqeel Ahmed, Chairman, Council for Leather Exports.

European market

Ahmed said the industry is heavily dependent on the European Union, which accounts for 55 per cent of the total leather exports while sales to the US are less than 1 per cent. “We are increasing our marketing efforts in the US,” he told newspersons.

“With the US’ sanctions on China, there are lots of opportunities for India to fill the vacuum created by China,” he added.

While the industry that employs around three million people imports raw materials worth $500 million, products worth nearly $6 billion are manufactured. The government is committed to the growth of the industry, he said.

India’s advantages

At around 500 million, India has the highest cattle population in the world creating sufficient raw material for the industry. Labour cost is cheap at $150 per month per person compared with $450 in China and $350 in Vietnam. With reforms, ease of doing business has also improved significantly and there is a positive perception among customers abroad, he said.

R Selvam, Executive Director, CLE, said that while the industry has good growth potential, there are concerns on labour and financing that need to be sorted out, and need to be on a par with countries such as China and Bangladesh. “We are trying to take advantage of the US sanctions by inviting firms from China, Taiwan and Vietnam to invest in India under the Make in India programme,” he added.