INTRODUCTION

The leather industry has a significant impact on the Indian economy. It is

among the top ten foreign exchange earners for the country. Indian cattle &
buffalo population accounts for 20% and the goat & sheep population of the
country accounts for 11% of the world’s total. This places it in a dominant
position in terms of affluent raw material availability.

With the leather industry being among the oldest trade in the country, India
has a strong skilled manpower and innovative technology. The country has a
strong and eco-sustainable tanning base and modern manufacturing units. It
also has strong support from the leather chemical and auxiliary industries.
The industry employs about 4.42 million people in the country. It is a
prominent source of employment in the rural parts of India with women
employment at about 30% in the sector.

India has four main leather sectors: Tanning, Footwear, Leather Garments
and Leather garments and Accessories. The country accounts for 13% of the
world’s total leather production. It is also the second largest producer and
consumer of leather footwear.

Major footwear and leather products producing states in India are Tamil
Nadu, West Bengal, Uttar Pradesh, Maharashtra, Punjab, Karnataka, Madhya
Pradesh, Haryana, Kerala, Rajasthan and Jammu & Kashmir.
Why Leather Industry Is
Important?
It’s easy to forget in our modern world of mass manufacturing that
humans have been making things for hundreds of years, and that the
majority of those products are still in use today. Leather is one of these
long-lasting items. Perhaps you have an idea for something made of
leather, or you simply want to learn more about how leather is created so
you can better appreciate your favourite shoes or belt. Whatever your
passion, leather is unquestionably one of man’s oldest materials. Because
it is so useful, it has outlasted innumerable other fads and fashions.
Leather has been utilised by various civilizations throughout history,
from clothes to furniture, purses to saddles.

World's tannery
The Leather industry in India accounts for around 13% of the world’s leather
production of hides/skins and handles a robust annual production of about 3
bn sq. ft. of leather. The industry is known for its consistency in high export
earnings and it is among the top ten foreign exchange earners for the
country. India has an abundance of raw materials with access to 20% of
world’s cattle and buffalo and 11% of the world’s goat and sheep population.
The Leather industry is an employment intensive industry providing job to
more than 4 mn people, mostly from the weaker sections of the society.
Women employment is predominant in Leather products industry with about
30% share. The Leather industry in India has one of the youngest workforces
with 55% of the workforce below 35 years of age.
The major markets for Indian Leather & Footwear Products are USA,
Germany, U.K, Italy, France, Spain, Netherlands, U.A.E, China, Hong Kong,
Belgium, and Poland.

EXPORT TREND
India is the second-largest exporter of leather garments, the third-largest
exporter of saddlery & harness and the fourth-largest exporter of leather
goods in the world. The garments sector accounted for 7.03% of the
country’s total leather export in 2021-22.

Out of the total leather and leather products exported out of India, the
footwear segment accounts for the majority of exports, with April-August
2022 exports valued at US$ 1,077.80 million. The export of leather, leather
products and footwear for the period April-August 2022 touched US$
2,377.34 million as against the performance of US$ 1,831.35 million in April-
August 2021, recording growth of 29.81%.The finished leather and footwear
components export in April-August 2022 stood at US$ 189.73 million and US$
121.64 million (20.59% YoY increase) respectively. The exports of saddlery &
harness and non-leather footwear stood at US$ 110.29 million and US$
125.64 million, respectively in April-August 2022.

During 2021-22, India exported total leather and leather products of value
US$ 4.87 billion, a 32% increase from the previous year. In August 2022, the
total leather exports stood at US$ 473.87 million.

EXPORT DESTINATIONS
India exports leather to more than 50 countries. USA, Germany, the UK, Italy,
France, Spain, Netherlands, China, Belgium, UAE, Australia, Poland, Hong
Kong, Denmark, Canada, Vietnam and Portugal are among the top importers
of leather and leather products from India. The top 15 countries account for
about 79.57% of the total exports.
USA is the largest importer of leather and leather products from India and
accounted for 25.19% of the country’s total leather exports during April-
August 2022. Germany and the UK accounted for 10.86% and 9.71% of the
exports during the same period.

During April-August 2022, the total export of leather products to USA was
valued at US$ 598.8 million, an increase of 51.35% YoY. During the same
period, Germany and the UK imported leather and leather products worth
US$ 258.12 million and US$ 230.75 million from India, respectively.

Italy, France and Netherlands together accounted for 49.32% of total leather
exports from India, with their import values at US$ 161.53 million, US$
115.57 million and US$ 101.62 million.

INDIA’S EXPORT OF LEATHER & LEATHER PRODUCTS 2019-20 vis-

a-vis 2020-21

Value in US$ Mn

CATEGORY APR – MAR

2019-2020
FINISHED LEATHER 524.15
LEATHER FOOTWEAR 2081.67
FOOTWEAR COMPONENTS 261.67
LEATHER GARMENTS 429.11
LEATHER GOODS 1353.74
SADDLERY AND HARNESS 151.44
NON-LEATHER FOOTWEAR 281.97
TOTAL 5083.76
India as Footwear hub
 The country accounts for 9% of the world’s footwear production and is
the second largest footwear producer and consumer in the world. For
every 1,000 pairs produced and sold in India per day, the sector has
the potential to create 425 jobs spanning manufacturing, allied
industries, and retail.
 In terms of volume, India is expected to product almost 3 bn units by
2024 growing at more than 10% annually.
 The Indian Footwear Market was valued at $ 9.70 bn in the year 2019
And as per Council for Footwear Leather & Accessories, the footwear
sector has the potential to grow up to $80 Bn, or eight times its present
size, by 2030
 The per capita footwear consumption in India is estimated to have
grown from 1.7 pairs in 2016 to 2 pairs in 2019

Strengths of Indian leather sector

 Own raw material source – About 3 billion sq ft of leather produced

annually
 Some varieties of goat / calf / sheep skins command premium
position
 Strong and eco-sustainable tanning base
 Modernized manufacturing units
 Trained / skilled manpower at competitive wage levels
 World-class institutional support for Design & Product Development,
HRD and R & D.
 Presence of support industries like leather chemicals and finishing
auxiliaries
 Presence in major markets – Long Europe experience
 Strategic location in the Asian landmass

Emerging strengths

 Design development initiatives by institutions and individuals

 Continuous modernization and technology up-gradation
 Economic size of manufacturing units
 Constant human resource development programme to enhance
productivity
 Increasing use of quality components
 Shorter prototype development time
 Delivery compliance
 Growing domestic market for footwear and leather articles
Growth Drivers
 High growth potential for exports
 The ready availability of leather
 The abundance of essential raw materials
 Rapid strides in the areas of capacity modernisation and expansion
 Skill development and environment management
 Favourable government policies
 Additional steps have been taken to increase the export of leather
and leather products:*

1. About 2% across the board enhancement of duty credit

scrip under Merchandise Exports from India Scheme
(MEIS) for shipments made from 1 November 2017

2. GST concessions for leather industry items –

 Finished leather from 12% to 5%,

 Certain leather chemicals, leather goods, leather

garments and saddlery items from 28% to 18%,

 Common Effluent Treatment Plants (CETPs) from

18% to 12%,

 Job work from 18% to 5% Footwear from 18% to

5%.

 GOI is preparing customised footwear for Indians by using 3D

technology to scan the feet of the person to prepare their footwear.
73 districts in the country are included to implement the project in the
first phase.*

HIGHLIGHTS OF PRODUCT SEGMENTS OF INDIAN LEATHER AND FOOTWEAR

INDUSTRY
 Tanning Sector – Annual availability of leathers in India is about 3 billion sq.ft.
India accounts for 13% of world leather production of leathers. Indian leather
trends/colors are continuously being selected at the MODEUROPE Congress
  Footwear Sector– India is Second largest footwear producer after China, with
Annual Production of 2.41 billion pairs (2017). India is also the second largest
consumer of footwear after China, with a consumption of 2.49 billion pairs.

 Footwear (leather and non-leather) export accounts for about 45.48% share in
Indian leather and footwear industry’s export (2018-19). The Footwear
products export mix is: Gents 58%, Ladies 30%, Children 9% and others 3%.

 Leather Garments Sector – India is the second largest global exporter, next
only to Italy, with a global market share of about 17%. Accounts for 8.23%
share of India’s total export from leather sector (2018-19).

 Leather Goods & Accessories Sector including Saddlery & Harness– India is
the fifth largest global exporter. Accounts for about 28% share of Indian
leather and footwear industry’s total export.

FUTURE OUTLOOK:-

The Government of India had identified the Leather & Footwear Sector as one of
the 12 Focus Sectors where India can be a Global Supplier. 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 of skilled manpower, innovative technology,
increasing industry compliance to international environmental standards, and
dedicated support of the allied industries, the Indian leather industry aims to
augment the production, thereby enhance export, and resultantly create
additional employment opportunities