‘New cattle trade rules will kill leather industry’

As and when existing stock of raw material is exhausted, sector may face a crisis, say traders

Two weeks after the notification that banned the sale of cattle for slaughter was issued, the leather sector is beginning to feel the heat. As the existing stock of raw skin and hides, which was sustaining the sector till now, is getting exhausted, a sense of apprehension has set in among industrialists.

From getting raw materials to production and employment, this ban could have a rippling effect on the leather sector if it continues to be implemented, a number of tanners say.

Tanners in Vellore district, one of the major hubs for leather production, have started to feel the pinch. Tamil Nadu accounts for 40% of the leather produced in the country, of which, Vellore district has a major share in production, according to S. Faiyaz Ahmed, honorary secretary of Ambur Tanners Association.

‘Stocks dwindling fast’

“As of now, the existing stock of raw materials is helping to sustain the industry. This stock might sustain the sector for the next two to three weeks, after which the ban’s real effect will be felt. The new arrivals of raw skin and hides will slow down if the ban continues to be implemented, and production will start dipping in tanneries,” he pointed out.

The ban, if continued, would kill the leather industry, he said, adding that they would have to import a lot of raw hides. “This is expensive, time consuming and not conducive for business. We import raw materials even now. But large imports would not help as the kind of buffalo and bull hides that is available in India, Pakistan and Bangladesh is not available anywhere in the world,” Mr. Ahmed said.

In fact, the ban came as bad news for industries in Pernambut, a place renowned for a making sole leather using buffalo hide in the country. “At least 80% of tanneries in Pernambut depend on buffalo hides for making sole leathers. They follow a traditional method for producing the leather, supply to shoe factories in Kanpur and Agra and also export,” he said. As a result of the ban, production would come to a standstill and affect shoe manufacturing in Agra and Kanpur, he added.

‘Customers worried’

“A sense of uncertainty is prevailing in the leather industry. Foreign customers, who place orders for leather, shoes and handbags, have started to ask us what will happen in the coming weeks,” he noted.

India’s share in the global trade of leather is 3%, and its overall exports of leather and products are worth six billion dollars, pointed out M. Rafeeque Ahmed, president of All India Skin and Hide Tanners and Merchants Association.

“If supply of raw material is affected, production will drop. This will affect the economy as tanneries cannot run in full capacity. Small scale units will be hit badly,” he said.

In the long run, tanners said that this would lead to retrenchment of employees in the sector. “Except cows, slaughter of buffaloes, bulls and ox should be allowed. We have already submitted a representation to the government,” he added.

Zafarullah, secretary of South India Tanners and Dealers Association said industries in Ranipet depended predominantly on buffalo calf skin. “Buffaloes should be exempted. If we are going to import, it will cost more. We are entering the Goods and Services Tax regime, in which there is a 5% tax on raw hide and 12% tax on finished leather. This is going to be an additional financial burden and we do not know how we are going to face it,” he said.

Mr. Faiyaz Ahmed said that the Central government should withdraw the notification in total.