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Shri Kamal Nath, Union Minister of Commerce & Industry, has called upon the leather industry to increase India’s leather exports to US $ 7 billion by the year 2010 from the present level of US $ 2.3 billion and to boost production in the leather sector to US $ 14 billion within the next five years. Participating in an interactive meeting with the leather industry, organised by the Council for Leather Exports (CLE) here this afternoon, Shri Kamal Nath said the effort should be to occupy at least 5% of world trade in leather within the next five years, as this would generate over one million additional jobs in the country.
“We have identified the leather industry as a ‘Thrust Sector’ in view of significant export growth prospects and enormous employment potential, particularly in semi-urban and rural areas. The Department of Industrial Policy & Promotion has a special Integrated Leather Development Programme for the leather industry, in order to modernise and upgrade it. We have sanctioned Rs.290 crore for this”, the Minister said. A sum of Rs.71 crore had also been provided in last one year alone by the government to support industry initiatives for specific infrastructure development and environmental safeguard measures in different leather clusters across the country, he added.
Value-added leather products today constitute nearly 80% of India’s leather exports, with footwear alone (both leather and non-leather) accounting for 36%, marking the transition of India from an exporter of raw hides and skins to a reliable source of value-added leather products. However, the Minister also noted that global leather trade was valued at US $ 100 billion whereas India’s of this was unsatisfactory at a meager two-and-a-half percent. “We must enlarge our share, given India’s raw material strength and availability of skilled manpower and competitive wage levels”, he said, while calling for adequate emphasis on design and technology; quality & innovation; and economies of scale.
In a presentation, the Chairman/CLE, Shri Rafeeque Ahmed said that recognising leather as a thrust sector in the Common Minimum Programme (CMP) and the policy support being extended by the union government was a major boost to the industry. The government’s latest approval of the Rs.290 crore modernisation and technology upgradation programme would help the sector achieve global competitiveness.
The export performance of US $ 2380 million or $ 2.3 billion (Rs.10691 crore) during 2004-05 was the highest so far which exceeded the target of US $ 2284 million or $ 2.2 billion (Rs.10263 crore). This is closely followed by previous year’s export growth of 18%. The positive export growth continues in the current year also as the export in April and May 2005-06 has been Rs.1480 crore as against Rs.1428 crore in the same period last year.
The sector is positioning itself to achieve higher growth through the required support measures. The most important of these are large investments, right sizing of production capacities, upgradation of technology, strengthening leather industry specific infrastructure etc. The US and Europe continue to be the leading markets for Indian leather products accounting for 75% of the export growth. The CLE has also drawn up a plan to promote overseas markets with appropriate strategies.
“Some of the major European producers are finding it difficult to sustain their manufacturing in the face of increasing costs particularly the wages. This gives an opportunity to the Indian manufacturing to substitute the gradual drop in Europe’s production. For this purpose, serious efforts are on to partner with the European manufacturers and increase the production base in India. There have been at least three manufacturing joint ventures in the leather sector in the last 2-3 years which includes the latest of Conceria Virginia, Italy, in tanning. Earlier, two sole manufacturing units from Italy namely Suolificio and Mondial Spa, partnered with Indian companies and started production. This apart, a major Spanish company namely Zahonero is in the process of establishing a manufacturing unit for shoe components with its own equity in Delhi”, CLE said.
SB/MRS
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