The Leather Industry holds a prominent place in the Indian economy. This sector is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the country.

With an annual turnover of over US$ 7 billion, the export of leather and leather products increased manifold over the past decades and touched US$ 3.59 billion in 2008-09, recording a cumulative annual growth rate of about 9.58% (5 years).

The Leather industry is bestowed with an affluence of raw materials as India is endowed with 21% of world cattle & buffalo and 11% of world goat & sheep population. Added to this are the strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and the dedicated support of the allied industries.

The leather industry is an employment intensive sector, providing job to about 2.5 million people, mostly from the weaker sections of the society. Women employment is predominant in leather products sector with about 30% share.

Though India is the second largest producer of footwear and leather garments in the world, India accounts for a share of close to 3% in the global leather import trade of US$ 127 billion (2007).

The major production centers for leather and leather products are located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul ; West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra & Noida ; Maharashtra – Mumbai ; Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh - Hyderabad ; Haryana  - Ambala, Gurgaon, Panchkula and Karnal; Delhi

Strengths of Indian leather sector

• Own raw material source – 2 billion sq ft of leather produced annually
• Some varieties of goat / calf / sheep skins command premium position
• Strong and eco-sustainable tanning base
• Modernized manufacturing units
• Trained / skilled manpower at competitive wage levels
• World-class institutional support for Design & Product Development, HRD and R & D.
• Presence of support industries like leather chemicals and finishing auxiliaries
• Presence in major markets – Long Europe experience
• Strategic location in the Asian landmass

Emerging strengths

• Design development initiatives by institutions and individuals
• Continuous modernization and technology upgradation
• Economic size of manufacturing units
• Constant human resource development programme to enhance productivity
• Increasing use of quality components
• Shorter prototype development time
• Delivery compliance
• Growing domestic market for footwear and leather articles

Government Support Measures:

• Leather sector is one of the “Focus Sectors” under Foreign Trade Policy of the Govt. of India
• Funding support provided towards export promotion & market development activities.
• Funding support provided towards technological upgradation and modernization of production units, leather industry infrastructure strengthening, environmental safeguard measures, Human Resource Development and other development projects.
• Entire leather sector is de-licensed facilitating for expansion on modern lines with state-of-the-art machinery and equipments. 100% Foreign Direct Investment permitted through automatic route.
• Import of specified machinery for use in leather and footwear industry allowed at a 5% concessional import duty.
• Duty free import of raw hides and skins, wet blue chrome tanned leather, crust leather and finished leather of all kinds including splits and sides thereof.
• Duty free import of specified critical inputs for manufacturers of leather garments and other leather products including footwear under Duty Free Import Scheme (DFIS).
• Basic customs duty exempted on machinery or equipment for Effluent Treatment Plants in leather industry.
• Duty neutralization/exemption/remission schemes are in place like Duty Drawback, Advance Authorization, Duty Entitlement Passbook Scheme (DEPB), Duty Free Import Authorization (DFIA) etc.,
• Gradual lowering of import tariff – current peak customs duty is 10%
• Simplified import/export procedures – quick customs clearances.
  

Estimated production capacities:

Highlights of Leather Product Segments:

• Tanning Sector – Annual production 2 billion Sq.ft.. Accounts for 10% of world leather requirement. Indian colors continuously being selected at the MODEUROPE Congress
• Footwear Sector - Second largest footwear producer after China. Annual Production 2065 million pairs. Huge domestic retail market 1950 million pairs (95%) are sold in domestic market. Footwear export accounts for 44.32% share in India’s export. The Footwear product mix Gents 54%, Ladies 37% and Children 9%
• Leather Garments Sector – Second largest producer with annual production capacity of 16 million pieces. Third largest global exporter. Accounts for 12.60% share of India’s total export
• Leather Goods & Accessories Sector - Fifth largest global exporter. Annual production capacity - 63 million pieces of leather articles, 52 million pairs of Industrial gloves & 12.50 million pieces of Harness & Saddlery items. Accounts for 24.68% share of India’s total export
  

Product-wise Brands sourced from India :

Besides, major brands are sourced from India , MNC brands are sold in India and Indian brands sold in India .

India 's export of leather and leather products for Five years

 

Export Scenario for the last five years

 

India 's Leather & Leather Products Export Basket (2012-11)

 

 

 

Country-wise Export Performance – 2012-11

Future Outlook:

The Government of India had identified the Leather Sector as a Focus Sector in its Foreign Trade Policy 2004-09 in view of its immense potential for export growth prospects and employment generation. Accordingly, the Government is also implementing various Special Focus Initiatives under the Foreign Trade Policy for the growth of leather sector. With the implementation of various industrial developmental programmes as well as export promotional activities, and keeping in view the past performance, and industry’s inherent strengths, the Indian leather industry aimed to augment the production, thereby enhance export to US$ 7.03 billion by 2013-14, and resultantly create additional employment opportunities for overall one million people.