India's $6 billion leather export industry to take a hit after ban

By

Maverick Martins

Published
May 29, 2017

India's leather export industry that is estimated at nearly Rs 40,000 crore ($6 billion) is likely to take a hit and loss of export market to China following the environment ministry's notification banning sale of animals for slaughter, according to a report in the Economic Times.

Leather industry in India has not seen much growth in the past couple of years and it feels the government should have consulted all stakeholders before taking the decision.

“China was already eating into Indian market share in the global market comprising Australia, Middle East, Europe and the US, and this news will give the country further competitive edge,'' said Indian Leather Products Association president Alok Prakash.

The ban has come as a big blow to the leather industry as earlier this year Finance Minister had announced scheme to revive the labour intensive leather and footwear sector.

The commerce and industry ministry had also suggested incentives for the leather and footwear sector.

“There was this system of farmers bringing unproductive animal for slaughter and selling at best price. But this will be disrupted and our supply chain will be severely affected and farmers will be at the mercy of traders,'' said Rafeeque Ahmed, president of All India Skin and Hide Tanners and Merchants Association (AISHTMA) in Chennai.

Mohammed Saif Khan, owner of Betochem, a leather trading company based out of Kanpur, expects the price of raw hide of buffalo to rise further.

“We were already running our unit at 50% of the capacity as availability of quality raw material was a big challenge in the last few months. Since February this year, prices have increased and the quality has dropped.''

China is giving tough competition to Indian leather manufacturers in terms of pricing.
The environment ministry's notification could severely hamper the governments aim to increase the sector exports to USD 15 billion by 2020 from the current USD 7 billion.