Indian leather explores new export destinations

Since the major export destination for India’s leather industry

Europe, which accounts for 60 per cent of total revenues earned, is reeling under an economic slowdown, industry players are exploring markets. The industry is venturing into non-European countries and is also joining hands with counterparts in Pakistan, Sri Lanka, Afghanistan and Bangladesh to deal with the raw material shortage and price-crunch due to recession in European markets.

But according to India Council for Leather Exports, despite the gloomy situation, industry managed to make revenues worth $4.9 billion (Rs 25,945 crores) in 2011-12 against the target of $4.7 billion (Rs 24,886 crores). While city-based exporters witnessed a 10-12 per cent drop in order flow from Europe, Tier-II and Tier III companies saw a drop of 20-25 per cent. Even the per capita usage of footwear in European countries has reduced from 4.5 pairs to one pair further leading to the drop in orders.

Now with new markets such as Southeast Asia, Japan, Korea, Africa and Latin America creating possible exports opportunities, the industry is moving towards them. Simultaneously its optimistic about the flow of new orders that are expected with year-end celebrations, including Thanksgiving and Christmas.

And to address issues pertaining to raw material, a regional industry association called Leather Industries Association of South Asia (LIASA) has been formed. Initially, it will be represented by India, Pakistan, Bangladesh, Sri Lanka, Nepal and Afghanistan. The aim is not only to explore new markets but also finding ways to reduce transaction costs and improving design efficiency.