When someone mentions the national economy or exports, you’re likely to think of a few key sectors: IT, petrochemicals, steel, automobiles. Sure, these heavyweights have been there for decades. But did you think of leather?

Leather employs over 4 million Indians, around 30% of them being women. The industry also employs a large number of youth – 55% of the leather workforce is below the age of 35. Since there isn’t so much scope for automation in making final products, leather will always need an abundance of skilled workers. For every $0.2 million invested, the industry generates 250 new jobs.

India accounts for about 12.9% of the world’s leather production – we make 3 billion square feet of it every year. India is the world’s second largest exporter of leather garments and the fifth largest exporter of leather goods and accessories. We are also the world’s second largest producer of leather shoes and garments. The major leather producing states are Tamil Nadu, West Bengal, UP and Maharashtra. Production is easy for us because we also happen to have 20% of the world’s cattle.

Leather exports touched $5 billion in FY 2019-20. More than half of this (51.7%) was footwear, while goods and accessories accounted for slightly over a quarter (26.4%). The rest of the pie was taken up by finished leather sheets, garments and saddlery & harness. The leather industry has been a consistent earner of dollars and is growing on the back of rising demand abroad plus government support for export-oriented firms. There is still tremendous growth potential – a lot more automation is possible in the processes that convert animal hide into finished leather.

Our biggest markets abroad are the US, Germany, the UK, Italy and France. These 5 countries account for about 51.9% of our leather exports.

The Government has identified leather as one of the 12 ‘Focus Sectors’ in which India can be a powerful global player. The sector has inherent competitive advantages – skilled manpower, abundant raw material, high value addition, steady demand. The aim for the near future is to promote exports, help firms comply with international environmental standards and increase overall ease of doing business.

Measures taken by the Government to promote the leather industry

• 100% FDI is allowed in manufacturing
• 100% FDI is allowed in single brand retailing, as long as 30% of products are locally sourced
• Comes under National Manufacturing Policy’s focus sectors, which cumulatively aim to generate 100 million new jobs by 2025
• 30% grant to purchase plant & machinery for micro & small scale units, and 20% for other units – under the IDLS scheme (Integrated Development of Leather Sector)
• 50% grant in development of Mega Leather Clusters to boost infrastructure and support services for production and exports
• LTIE sub-scheme (Leather Technology, Innovation and Environment) – 70% grant to setup or upgrade common effluent treatment plants
• HRD Sub-scheme – placement linked skill development for unemployed people at $230 per person, skill upgrades to employed people at $76 per person, training for trainers at $3076 per person.

Key bodies involved in Indian Leather Industry

• CLE (Council for Leather Exports)
• CLRI (Central Leather Research Institute)
• NIFT (National Institute of Fashion Technology)
• FDDI (Footwear Design and Development Institute)
• CFTI (Central Footwear and Training Institute)

Data from:

https://www.investindia.gov.in/sector/leather
https://leatherindia.org/indian-leather-industry/
https://www.makeinindia.com/sector/leather