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Annual Report 2011-12
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:: PRESS RELEASES |
INDIAN LEATHER INDUSTRY: PERSPECTIVE AND EXPORT POTENTIAL EXIM BANK STUDY
Exim Bank's latest study titled, 'Indian Leather Industry: Perspective and Export Potential' highlighted the capability of the country to increase its share in the global leather trade, in view of its rich resource base of raw hides and skins and human capital. The study noted that leather exports from India accounted for around 3% of global leather exports. The study observed that the major export markets for India are USA, Germany, UK and Spain. India has a lot of potential in these markets, as it has unique advantage of economies of scale and capability of producing niche products.
With about 40% of production being exported, the Indian leather industry accounted for around 3% of total exports from India in 2004-05. Leather footwear is the largest exported product among different categories of leather exports. Footwear is a critical segment, as this is expected to be the engine of growth for the Indian leather industry.
The study focused on various challenges that hinder the export growth of the Indian leather industry. These include effluent management, quality specifications, non-tariff barriers, and cost of compliance to various standards. However, the study is of the view that there are ample opportunities to realise the export potential of this sector, with the adoption of proper strategies.
The world leather industry is in the process of shifting its manufacturing base from developed to developing countries. This presents an opportunity for increased flow of foreign direct investment into India. Against such scenario, factors such as abundance of leather, increasing awareness for quality, production know-how and designing capabilities, work India's favour. Increasing presence of large corporate houses in this sector would help enhance the investments required, and thereby the competitiveness in international markets.
The study delineated the importance of foreign direct investments along with technology transfer, which would help India to attain a quantum jump in leather exports. This will be one way of meeting the large funding requirements needed for modernization of the leather industry in India. Diversification of export markets is another important strategy for the Indian leather industry. The study observed that a lot of emphasis is being given to latest fashion trends in the international markets and hence the industry should give equal importance to the design and fashion trends.
The study highlighted the importance being given to this industry by the Government of India as one of the focus sectors. Various schemes and programmes have been recently announced to augment the growth of this sector. These schemes are expected to position the Indian leather industry in high growth trajectory.
For further information, please contact
S. Prahalathan,
Deputy General Manager
Planning & Research Group,
Export-Import Bank of India,
Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade,
Mumbai-400005.
Telephone: 2216 0364,
Fax: 22180743;
e-mail: prahalathan@eximbankindia.in
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