The leather industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. Endowed with the largest cattle population in any country of the world and cheap and abundant manpower, India is well-equipped to have the comparative advantage in the production of leather and leather goods.
The country is among the top four producers of finished leather apart from countries like Italy, Korea and China accounted for 40% share of the total world leather production. There has been a shift with the industry moving to low-cost labour countries such as China, Indonesia, Thailand and India; and yet, the Indian share in the total market has remained low. India and China are entering into a cooperation phase in certain areas of leather industry, such as technology, training and tackling environmental and other global issues.
The Indian leather industry suffered from the handicap of low investment and sub-standard technology. As a consequence, India's share in the global market remains at a low of 3%. Of late, the country has emerged as a significant exporter with more sophisticated and value-added products. In fact, it is fast changing from a raw material exporter to an exporter of more upgraded finished products. The product range has got widened and with greater innovation a substantial value addition is being secured.
To exploit the full potential of the industry, the government launched the Leather Technology Mission with twin-objectives with the first one aiming at restructuring and streamlining the industry to make it internationally competitive, and secondly protecting the interests of the small scale and tiny sectors.
The leather industry is spread in different segments, namely, tanning & finishing, footwear & footwear components, leather garments, leather goods including saddler & harness, etc. The product variation covers semi and finished leather, footwear and footwear components, garments for ladies and gents, handbags for ladies and gents, wallets, diaries and cardholders, gloves and fashion accessories, tableware, upholstery (for houses, offices and vehicles), and luggage and portfolio bags.
Apart from manpower required in the collection of hides, the industry claims an employment of 2.5 million, most of which is engaged in the small and informal sector making up for 75% of the total industry. The size of the leather industry is estimated at around Rs 300 billion today. The leather industry is targeting an 8-10% share in global trade by 2010-11. The industry is aiming at doubling export turnover to $ 4 billion. This would call for an investment of at least Rs 120 billion in plant and machinery and infrastructure development.
Some of the major leather exporters include Tata International Ltd., Florind Shoes Ltd., Punihani International, Farida Shoes Ltd., and Mirza Tanners Ltd.etc. The major markets of Indian leather products are the USA, the UK, Germany, Italy and France.