From exports to job creation; niche products to mass market
CHENNAI: Union Minister of State for Commerce Jairam Ramesh has urged the leather industry to change its focus from exports to job creation, from niche products to the mass market, from Europe to the U.S. and from Tamil Nadu to the rest of India.
Speaking at the inauguration of the India International Leather Fair 2007 at the Chennai Trade Centre on Wednesday, Mr. Ramesh said that India should grab the opportunity offered by the anti-dumping duties recently slapped on China and Vietnam and enter the high-volume, low-value footwear market in a big way. Pointing out that the largest mass market lay in the U.S., he urged exporters to diversify their destinations beyond Europe.
Union Minister for Communications and Information Technology Dayanidhi Maran, who inaugurated the fair, said that reaching the U.S. market would require large-scale capacity expansion plans.
"State governments need to think how to encourage the industry to think big," he said, pointing out that while the U.K. market may only need 10,000 pairs of shoes per order, the U.S. would require production of 100,000 to 200,000 pairs.
Apart from infrastructure development, logistics also needed to be improved if India was to compete with China in the U.S. footwear market, said Mr. Ramesh, urging the Shipping Ministry to facilitate a direct container shipping link from Chennai port to the U.S. and Europe within the next year. Currently, shipments go via Colombo or Singapore.
Mr. Ramesh said that while every attempt should be made to reach the leather exports target of $7 billion by 2011, it was more important to generate half a million new jobs in the sector, especially for women.
He welcomed the Council for Leather Exports' Rs 7 crore project being carried out in Kancheepuram district, which directly links leather-related self-help groups to larger producers and the international market.
The project will soon be expanded to six other districts across the country.
He also urged the CLE to look at developing the industry outside Tamil Nadu.
"It's the Council for Leather Exports, not the Council for Tamil Nadu Leather Exports," Mr. Ramesh reminded them, saying that while 25 per cent of footwear came from Agra, the situation there was "pathetic."
Apart from established centres like Tamil Nadu, Uttar Pradesh, West Bengal, Andhra Pradesh and Punjab, the CLE should also focus on potential States such as Bihar and Assam, he said.
Mr. Maran, however, urged Mr. Ramesh not to ignore the industry in Tamil Nadu.