Leather Industry in India : Key Facts

Leather Industry has a prominent place in Indian Economy because of its substantial export earnings and employment generation. As of 2015, some 25 Lakh persons are employed in the leather industry in India.

The industry is demand driven. The demand of leather comes from fashion, footwear, interior design and automotive industries. India was once a raw material supplier, but the drastic growth in the industry has transformed the country into a value added product exporter. Currently, India accounts for 10% of world’s leather production and half of India’s leader revenue comes from exports. Current share of India in global leather trade is around 3%.

Key Drivers

The key drivers of leather industry include:

• Huge domestic markets
• Overseas demand of leather products
• abundance of raw material – India is endowed with one fifth of world’s cattle and buffalo and 11% of goat and sheep population.
• 55% of workforce is below 35, so this industry has one of the youngest and productive workforce.

Government policy

100% Foreign Direct Investment is permitted through the automatic route in leather industry. There is no import duty on the import of raw hides and skins, semi-processed leathers like wet blue, crust leather or finished leather. Leather Sector has been identified as a Focus Sector in the Foreign Trade Policy and this sector gets incentives under Focus Product Scheme, Focus Market scheme, EPCG (Export Promotion Capital Goods Scheme) etc. foreign trade promotion schemes.  Kanpur, Agra and Ambur have been recognized as “Towns of Export Excellence” (TOEE) for leather products in FTP.

Indian Leather Development Programme

This scheme is being implemented by DIPP in the 12th plan with a total outlay of Rs.990.36 crore. This scheme has several components such as Integrated Development of Leather Sector (IDLS) that aims at upgradation of units engaged in leather industry; Support to Artisan (STA), which provides common facility centres, product development and marketing linkages; HRD component to provide skill development; Leather Technology, Innovation and Environmental Issues to envisage measures to help industries cope up with stringent norms.  Further, the Mega Leather Cluster (MLC) sub-scheme aims at establishment of Mega Leather Clusters (MLC) with world class infrastructure with latest technology equipped production chain to meet the demand of both domestic market as well as standards for export.