Indian leather exporters are now turning their eyes towards the hugely untapped but maturing domestic leather market. Though export potential remains high for them, the Indian market, which is evolving in a structured way on the back growth in organised retail, has started attracting the exporters.
India is the third largest consumer of footwear in the world. The total domestic market size is estimated at about Rs.25,000 crore, and the share of organised segment at about Rs.11,000 crore.
The Council for Leather Exports (CLE), an apex body of the Centre for promotion of leather exports, and the exporters have sought some measures, including cut in high excise duty on end-products, from the government. CLE has also established a domestic industry cell to support this focus.
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“We have asked for a reduction in central excise duty (CED) from 12 to 6 per cent, and an increase of abatement rates from 35 to 70 per cent. Also, we want central excise exemption on footwear to be enhanced to footwear with MRP up to Rs.1,000 as against the existing exemption provided up to Rs.500,” Rajendra K Jalan, Chairman, CLE, said.
P.R. Aqeel Ahmed, Regional Chairman, CLE, pointed out that exporters were shying away from tapping domestic potential due to absence of wholesalers and structured mechanisms earlier. “With the growth of organised retail and entry of global brands, domestic market now offers immense potential. Brand conscious stand-alone shops are doing well in India,” he added.
Some of the leading organized footwear retail players in the country include Bata, Reebok, Adidas, Liberty, Nike, Action, Woodland and Metro and. The footwear retail segment has also seen entry of new players such as Reliance and Pavers England.
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CLE is preparing to hire a renowned consultancy firm to carry out a study on the leather products industry to assess the present status of organised and unorganised segments as also other aspects.