Hit by economic crisis in the European Union, leather manufacturers and exporters are now planning to tap the U.S. market.
During 2014-15, the Indian leather sector exported materials worth $6.58 billion, up from $5.91 billion last year, representing a growth of 10.4 per cent. This is short of the $7 billion target set by the leather industry.
“As the time is short, we should focus on setting up infrastructural facilities to ramp up production and implement tanneries with zero liquid discharge facilities,” — M. Rafeeque Ahmed, Chairman, Council for Leather Exports
Having missed the target due to crisis in the EU, leather exporters are now betting on the U.S. market for survival and turnaround. Last year, India exported about 56 per cent of materials such as leather garments, finished leather, saddler and harness and other items to European market. The U.S. market accounted for 12.5 per cent in 2014-15.
Council for Leather Exports Chairman M. Rafeeque Ahmed said: “We are one of the top ten foreign exchange earners for the country. Last year, we could not achieve the targeted growth due to the economic and currency crisis in the EU. In the last four months, the Euro has fallen significantly against the U.S. dollar and this has affected us badly. Besides, imposition of retaliatory sanction by Russia on Europe Union also affected us, as these items had to be shipped through Europe.”
Thick skin, nowhere to hide
1. Leather exports below $6 billion
2. No target fixed for the current year
3. Exports to EU accounts for 56 per cent
4. The U.S. accounts for 12.5 per cent
4. During 2014-15, the industry recorded 10.4 per cent growth against 17%
Admitting that it won’t be an easy task to find an alternative market at a short notice, Mr. Rafeeque Ahmed, however, said that exporters had decided to focus on the U.S. market. “It is not easy to bag new contracts in a shorter period. So, we have not fixed the export target for the current year. We are planning to export about 15 per cent of our produce,” he said.
“The industry has set an export target of $14 billion by 2020. To achieve this, we should focus on setting up infrastructural facilities to ramp up production, implement tanneries with zero liquid discharge facilities to tackle pollution, seek interest sub-intervention from the Centre and setting up mega leather cluster with adequate infrastructural facilities,” he said.
Major markets:
The major markets for leather & leather products are Germany with a share of 12.92 per cent, the U.S. 11.32 per cent, the U.K. 11.20 per cent, Italy 8.73 per cent, France 5.99 per cent, Hong Kong 7.98 per cent, Spain 5.21 per cent, the Netherlands 3.66 per cent, China 2.60 per cent, Denmark 1.51 per cent, the UAE 3.05 per cent and Belgium 1.62 per cent.
These 12 countries account for nearly 76 per cent of leather and leather products export.
EU accounts for 57 per cent of export of leather and leather products.
