Introduction

 The Leather industry in India holds a significant place in the Indian economy.
 The Leather industry in India is consistent in its high export earnings and is among the top
10 foreign exchange earners for India.
 The Leather industry in India stands at $17.85 Bn (Exports – $5.85 Bn, Domestic Market –
$12 Bn). The exports from April-Jan 2018-19 are recorded as $4750.62 Mn.
 Export of different categories of Footwear (leather & non-leather and components) holds a
major share of about 50.34%.
 The Leather industry in India is an employment-focused industry, providing jobs to about
4.42 Mn people.
 India is the 2nd largest producer of footwear, 2nd largest exporter of Leather Garments, the
5th largest exporter of Leather Goods and 3rd Largest Exporter of Saddlery and Harness items.

IMPACT OF MAKE IN INDIA ON LEATHER INDUSTRY

Impact of 'Make In India' Initiative on leather sector

 Under ‘Make in India’ Action Plan, it was envisaged to provide training and placement to 3
million unemployed youth for all stages of leather development.  During last three financial
years i.e. 2014-15, 2015-16 & 2016-17, a total of 4,27,865 unemployed persons have been
provided skill development training and out of such trainees, 3,45,676 have been employed in
leather and footwear industry under Human Resource Development (HRD) sub-scheme of Indian
Leather Development Programme (ILDP). The Year wise status of training and FDI inflow are
as under:-

FDI
No. of persons
Year No. of persons Trained
Employed (in US$
million)
2014-15 138608 113244 34.21
2015-16 144093 115660 17.13
2016-17 145164 116772 2.30
Total 4,27,865 3,45,676 53.64

            The draft Prevention of Cruelty to Animals (Regulation of Livestock Market) rules were
notified on 16.01.2017 by the Ministry of Environment, Forest & Climate Change inviting
objections and suggestions from all persons likely to be affected by it within 30 days. The
Ministry of Commerce & Industry was not specifically consulted.
SOURCE: The Minister of State for Commerce and Industry Shri C.R.Chaudhary gave this
information in a written reply to a question in Rajya Sabha today.

HISTORY:

Leather goods and products have always been used by man for many millennia as a tool of
luxury, protection, comfort, utility, fashion, and warmth. The Indian love affair with this highly
versatile and useful material dates back almost five thousand years. Today, Leather is still
regarded as a symbol of prestige and well-being.

Mashak’s ( Water sacks made of leather ) were widely used in India in the olden days

The First documented evidence of leather appears in the Hindu holy scriptures of the Vedas. The
Rig-Veda has documented the use of Leather ‘Mashaks’ or sacks as early as 3000 B.C as well as
bottles. Straps and bands were manufactured with leather and bags, sails were also made of the
same materials. In fact, the writings also talk about the great-sage Agasthya and one of the
excerpts mentions him saying the words “ I deposit the poison in the solar orb like a leather
bottle in the house of vendor of spirits “. References have also been made to the use of leather
articles in the law books of Sankhya and Likhita that date back to 2000 B.C. The use of words
such as charmanta, charmapath, varatra, chasabandha which can be found in old Sanskrit
literature indicate that straps, bands, and strings of leather were in common use back then,
depicting the historical value of leather and it’s nearly immortal novelty value.

The first-person accounts of the intrepid explorer Marco-polo also serve as a periscope into the
early beginnings of the leather manufacturing industry in the 1800s. In his accounts, he mentions
that “The curing of hides and the manufacture of leather were two of the most important of
Gujarat 42 industries. Every year a number of ships went to Arabia laden with the skins of goats,
oxen, buffalos and other animals. The leather was used for sandals and was cleverly worked into
red and blue sleeping mats exquisitely inlaid with figures, birds, and beasts and skilfully
embroidered with gold and silver wire”. Trade was also carried out between Gujarat and the
neighbouring foreign state through the famed ‘Silk route’. Uttar Pradesh in India occupied a
predominant position in the making of finely crafted ‘Joothis’ and leather wear for the Mughals
and the elitist society of the Mughal Court. In the South leather formed one of the items of trade
between the South Indian states and the Greek and the Roman kingdoms of Europe. The leather-
making activities were mainly in the hands of the village chamars then and were sufficient to
meet the local needs. International export started later on after the year 1880.

In 2017, Indian Leather accessories are exported the world over

The twentieth century marked a new period in the trade history of the Indian leather industry.
During 1900-1914, the export scene was dominated by Calcutta and Madras with the former
exporting raw goods and the latter tanned ones. In 1912-13, the total export of hides/skins
amounted to INR 8 crore as against INR 4 crore from Madras. This was because 17 of the 22
organized tanneries were in Madras and the rest remained scattered in Bengal, Bihar, Orissa, and
Bombay. The outbreak of World War II gave an impetus to the development of leather and
leather goods industry in India. While in 1913-14 only 25 large units, employing 2,753 workers,
were established, by 1941, the number of units had increased to 114 and the workers to 26, 056.
Before 1947, though the British had shown considerable interest in leather manufacturing in
India and had even established some chrome tanning units in Bengal. According to a recent
survey, there are 2091 manufacturing units currently in the country out of which 1803 units are
in the small-scale sector and 288 are large-scale units to cater to the needs of an ever-growing
and demanding population.

MAKE IN INDIA CAMPAIGN BY GOI

AND ACHIEVEMENT REPORT
the Government of India has launched ‘Make in India’ campaign on 25th September 2014, which is a
major new initiative designed to facilitate investment, foster innovation, enhance skill development,
protect intellectual property, and build best-in-class manufacturing infrastructure in India. Attracting
Foreign Direct Investments and encouraging joint venture collaborations between foreign and Indian firms
to manufacture in India is the major focus of ‘Make in India’ programme. Most importantly, the Make in
India programme represents an attitudinal shift in how India relates to investors: not as a permit-issuing
authority, but as a true business partner. 
In view of the fact that the leather sector hold immense potential for growth both on the export front as
well as domestic retail market front, and also has enormous scope generating more employment
opportunities for the weaker sections of the society, the Government of India has identified Leather Sector
as one of the focus sectors for the Make in India programme.
 The capacities building in the leather and product sectors in India is considered one of the crucial
requirements for enhancing production and to achieve the high target set for the industry.

KEY ACHIEVEMENTS
 Indian Footwear, Leather & Accessories Development Programme (IFLADP), a special
package for employment generation in the Leather and footwear industry has been launched in
December 2017. The approved expenditure for this is $371 Mn from 2017-18 to 2019-20. Under
the programme, 4 projects have been approved with a total outlay of $15 Mn. This is to facilitate
upgradation of infrastructure, job creation and environmental sustainability in Tamil Nadu.17 
 In-principal approval for the mega leather cluster in West Bengal with employment potential
for around 7000 people and an investment of up to $64 Mn. Under the scheme, a total of 9
projects for Common Effluent Treatment Plant upgradation, with a gross value of $67 Mn and
government assistance of $46 Mn have already been approved and are under implementation.
 During 2017-18, primary skill development training has been provided to 94,231
unemployed persons in the Leather & footwear industry and of them, 71,125 trainees have been
provided placement.18

THE PDF FOR ACHIEVEMENT REPORT OF LEATHER INDUSTRY AFTER GOI CAMPAIGN OF
MAKE IN INDIA IS GIVEN IN A PDF FILE

Growth Drivers
 High growth potential for exports
 The ready availability of leather
 The abundance of essential raw materials
 Rapid strides in the areas of capacity modernisation and expansion
 Skill development and environment management
 Favourable government policies
 Additional steps have been taken to increase the export of leather and leather products:

1. About 2% across the board enhancement of duty credit scrip under Merchandise Exports
from India Scheme (MEIS) for shipments made from 1 November 2017
2. GST concessions for leather industry items – 
o Finished leather from 12% to 5%,
o Certain leather chemicals, leather goods, leather garments and saddlery items
from 28% to 18%,
o Common Effluent Treatment Plants (CETPs) from 18% to 12%,
o Job work from 18% to 5% Footwear from 18% to 5% 8
Reasons to invest
 Opportunity to set-up export units: Exports are projected to reach $9.0 Bn by 2020, from the
present level of $5.85 Bn. India has trade agreements with Japan, Korea, ASEAN, Chile etc., and
is negotiating Free Trade Agreement with the European Union, Australia etc.
 Opportunity to tap the huge domestic market in India: The domestic market is expected to
reach $18 Bn by 2020.
 Comparative advantages exist in production cost and labour costs as compared to other major
manufacturing countries.
 Skilled/trained manpower is available for a new production unit or existing production unit.

Opportunities to invest:
As per the Doing Business 2019, World Bank, India is ranked 77. Many initiatives under
National Trade Facilitation Action Plan (2017-2020) have upgraded the productivity of cross-
border trade, reducing border and documentary compliance time for both exports and imports. 14
•    The National Manufacturing Policy identifies leather as a special focus sector, for growth and
employment generation. The policy aims at a GDP of 25% along with a creation of 100 mn jobs
in all sectors by the year 2025. 15
•    Presence of huge production centres in the form of Mega Leather Clusters (MLC) with all
required infrastructure, where investors can set-up one of these MLCs.
As on July 2018, special purpose vehicle at Jalandhar, under the Mega Leather Cluster scheme is
under consideration.16
LOCATION OF THE MLC
Project Approved
•    Kothapatnam Village, Kota Mandal, Andhra Pradesh (Area: 537 acres)
Project under consideration
•    IMT Rajkot, Mewat, Haryana (Area: 105 acres)
•    Sandila Industrial Area in Hardoi district & Ramaipur in Kanpur district. (Area: 150 acres) 

FOREIGN INVESTORS:
 Apache Group (Taiwan), Nellore, Andhra Pradesh
 Feng Tay Shoes (Taiwan), Cheyyar, Tamil Nadu
 Itares (Italy), Ambur, Tamil Nadu
 FDI POLICY AND FINANCIAL SUPPORT
 Leather products manufacturing is allowed 100% FDI through automatic route.
 Government of India has allowed 100% FDI in single-brand retailing in India, with a clause
of 30% mandatory local sourcing.9 
 The Leather industry in India is de-licensed, facilitating expansion on modern lines with
state-of-the-art machinery and equipment.

FINANCIAL SUPPORT
 Under the Leather Technology, innovative and environmental issues sub-scheme
of Indian Leather Development Programme (ILDP), following assistance is provided: 
 Up to 50% of the project cost with a ceiling of $7.69 Mn for upgradation /installation of
Common Effluent Treatment Plants (CETPs)
 Addressing the environmental pollution caused by leather units
 Solid waste management through environmental workshops 11
 Integrated Development of Leather Sector (IDLS) sub-scheme  of ILDP, 30% grant is
provided on the cost of plant and machinery for Micro and Small units and 20% for other units,
with a ceiling of $0.307 Mn for each product line.
 Mega Leather Cluster (MLC) sub-scheme of ILDP, 50% grant with a ceiling of $19.23 Mn
based on size is provided. This is mainly for the establishment of Mega Leather Clusters to boost
infrastructure facility and support services for production and export.
 Human Resource Development (HRD) sub-scheme: An assistance for Placement Linked
Skill Development training to unemployed persons is provided –$230 per person, for skill up-
gradation training to employed workers- $76 per employee and for training of trainers –$3,076
per person. The Footwear Design and Development Institute (FDDI) has established itself as the
premier training institute for the provision of skilled manpower in the leather industry. It has
55 training centres across India including eight branches. Another 4 branches are being set
up.12 About 25,643 persons have been trained under primary skill development training
programme during 2018-19. 13
 Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme:  MLFAC provides
infrastructure support to the leather, footwear and accessories sector. Graded assistance is
provided up to 50% of the eligible project cost, excluding cost of land with Government
assistance being limited to $19 Mn.
 Leather Technology, Innovation and Environmental sub-scheme:  The help is provided for
upgradation/installation of Common Effluent Treatment Plants (CETPs) @ 70% of the project
cost. The sub-scheme also offers support to national level sectoral industry council/ association
and support for preparation of vision document for Leather Footwear and Accessories Sector.
 Promotion of Indian Brands in Leather, Footwear and Accessories sub-scheme:  Eligible
units are approved for Brand Promotion. Government assistance is limited to 50% of total project
cost subject to a limit of $461,538 for each brand, annually for 3 years.
 Additional Employment Incentive for Leather, Footwear and Accessories Sector
scheme: Employers contribute 3.67% to employees provident fund for all working in the leather,
 footwear and accessories sector.  The employees are enrolled in Employees' Provident Fund
Organization (EPFO) for first 3 years of their employment.

LEATHER INDUSTRY EXPORTS

INDIAN LEATHER INDUSTRY – OVERVIEW, EXPORT PERFORMANCE & PROSPECTS

 

 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.
 The export of footwear, leather and leather products from India reached a value of US$ 5.69 billion during
2018-19.
 The leather industry is bestowed with an affluence of raw materials as India is endowed with 20% 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 4.42 million people, mostly
from the weaker sections of the society. Women employment is predominant in leather products sector with about 30%
share.
 India is the second largest producer of footwear in the world, producing about 2.41 billion pairs (2017).
 India is the second largest exporter of leather garments and third largest exporter of Saddlery & Harness in
the world.
 The major production centers for footwear, leather and leather products in India are located in the States of
Tamil Nadu – Chennai, Ambur, Ranipet, Vaniyambadi, Vellore, Pernambut, Trichy, Dindigul and Erode; West
Bengal – Kolkata; Uttar Pradesh – Kanpur, Agra, Noida, Saharanpur; Maharashtra – Mumbai; Punjab –
Jalandhar; Karnataka – Bengaluru; Telengana Hyderabad; Haryana – Ambala, Gurgaon, Panchkula, Karnal and
Faridabad; Delhi; Madhya Pradesh – Dewas; Kerala – Kozhikode and Ernakulam / Cochin; Rajasthan; Jaipur; Jammu
& Kashmir; Srinagar.
 

Strengths of Indian leather sector

 

 Own raw material source – About 3 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 up-gradation
 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
 
Highlights of Product Segments of Indian Leather and Footwear Industry
 

 Tanning Sector – Annual availability of leathers in India is about 3 billion sq.ft. India accounts for 13% of
world leather production of leathers. Indian leather trends/colors are continuously being selected at the MODEUROPE
Congress
 

 Footwear Sector – India is Second largest footwear producer after China, with Annual Production of 2.41
billion pairs (2017). India is also the second largest consumer of footwear after China, with a consumption of 2.49
billion pairs.
 

Footwear (leather and non-leather) export accounts for about 45.48% share in Indian leather and footwear industry’s
export (2018-19). The Footwear products export mix is:  Gents 58%, Ladies 30%, Children 9% and others 3%.

 Leather Garments Sector – India is the second largest global exporter, next only to Italy, with a global
market share of about 17%. Accounts for 8.23% share of India’s total export from leather sector (2018-19).
 

 Leather Goods & Accessories Sector including Saddlery & Harness – India is the fifth largest global
exporter. Accounts for about 28% share of Indian leather and footwear industry’s total export.
 

INDIA’S EXPORT OF LEATHER & LEATHER PRODUCTS FOR 5 YEARS

  
                                                                                               Value in US$ Mn
Product 2014-15 2015-16 2016-17 2017-18 2018-19
Finished Leather 1329.05 1046.45 888.39 874.24 721.73
Leather Footwear 2278.18 2147.98 2128.87 2193.86 2195.47
Footwear Components 361.29 284.34 298.69 335.24 319.10
Leather Garments 604.35 553.11 518.96 518.96 468.48
Leather Goods 1452.83 1370.04 1365.22 1365.79 1434.24
Saddlery & Harness 162.7 146.38 155.88 155.97 159.35
Non-Leather Footwear 306.44 306.74 296.68 296.91 392.63
Total 6494.84 5855.06 5646.79 5740.97 5691.00
% Growth 9.37% -9.85% -3.56% 1.67% -0.87%
 
 
Source: DGCI&S  

 
% SHARE OF LEATHER & LEATHER PRODUCTS FY 2018-19

 
Major Markets:
 

 The major markets for Indian Leather & Leather Products are USA with a share of 15.70%, Germany
11.58%, UK 10.50%, Italy 6.48%, France 5.68%, Spain 4.54%, UAE 3.97%, Netherlands 3.42%, Hong Kong 3.34%,
China 2.60%, Poland 2.02%, and Belgium 2.00%.
 These 12 countries together accounts for nearly 71.84% of India’s total leather, leather products and
footwear export.
 European Union accounts for 54% of India’s total export of leather and leather products.
 
% SHARE OF INDIA’S EXPORTS OF LEATHER & LEATHER PRODUCTS
IN TOP 12 COUNTRIES IN US $ MN FY 2018-19
 

 
 
INDIA’S EXPORT OF LEATHER & LEATHER PRODUCTS TO VARIOUS COUNTRIES FOR LAST 5
YEARS.
 
                                                                                           (Value in million USD)
COUNTRY 2014-15 2015-16 2016-17 2017-18 2018-19 %Share of 2018-19
USA 768.06 834.10 867.19 847.30 893.68 15.70%
Germany 800.20 674.19 657.37 684.41 659.18 11.58%
UK 751.33 716.49 606.18 616.41 597.30 10.50%
Italy 504.26 407.91 374.09 389.06 368.71 6.48%
France 371.75 308.45 287.74 326.38 323.02 5.68%
Spain 351.27 327.86 293.43 281.30 258.26 4.54%
U.A.E. 281.07 263.15 226.72 161.27 226.18 3.97%
Netherlands 224.92 182.97 169.00 196.98 194.43 3.42%
Hong Kong 422.11 315.26 265.60 248.07 190.31 3.34%
China 194.26 162.21 173.72 170.34 148.21 2.60%
Poland 81.74 65.20 101.06 144.47 115.02 2.02%
Belgium 108.88 84.84 104.90 114.80 114.09 2.00%
Somalia — 100.12 94.12 58.82 102.24 1.80%
Vietnam 115.57 105.54 92.38 104.81 98.44 1.73%
Australia 84.66 84.71 82.66 91.16 95.36 1.68%
Portugal 68.39 62.13 67.61 68.62 68.77 1.21%
Denmark 83.90 76.17 77.22 69.35 67.39 1.18%
Korea Rep. 68.47 82.38 68.65 67.22 66.12 1.16%
Japan 56.21 59.24 63.87 71.42 65.53 1.15%
Russia 49.96 49.01 51.15 56.08 52.59 0.92%
South Africa 55.04 52.87 44.13 43.80 52.28 0.92%
Chile 53.12 52.18 41.85 44.90 48.87 0.86%
Malaysia 62.99 54.58 48.60 48.77 46.32 0.81%
Austria 35.48 26.20 27.86 46.26 43.82 0.77%
Canada 59.24 47.25 46.94 50.50 43.27 0.76%
Sweden 46.48 38.14 40.83 43.20 40.02 0.70%
Nigeria 12.30 17.02 20.29 24.75 37.53 0.66%
Indonesia 28.95 25.62 26.97 33.82 37.23 0.65%
Mexico 8.57 12.49 12.14 19.36 36.07 0.63%
Saudi Arabia 47.42 36.77 40.86 37.87 33.65 0.59%
Kenya 8.26 12.73 30.25 22.04 32.29 0.57%
Switzerland 37.05 29.74 24.83 30.37 31.41 0.55%
Slovak rep 0.00 30.71 31.48 36.44 26.61 0.47%
Hungary 30.96 23.46 28.23 24.65 24.31 0.43%
Thailand 28.79 18.22 19.82 19.82 20.20 0.35%
Bangladesh 18.08 17.66 34.98 27.59 19.84 0.35%
Finland 23.55 16.80 17.25 19.76 18.64 0.33%
Turkey 39.63 27.60 19.96 22.63 16.31 0.29%
Israel 13.92 13.35 13.24 15.87 15.86 0.28%
Cambodia 10.81 12.62 10.37 7.27 10.84 0.19%
Czech Republic 22.52 10.45 9.34 11.91 10.52 0.18%
Greece 14.22 10.95 10.16 10.28 10.46 0.18%
New Zealand 12.11 11.23 9.81 9.88 10.16 0.18%
Oman 11.21 12.76 12.29 9.32 9.46 0.17%
Sri Lanka Des 10.13 13.85 14.42 12.34 9.39 0.16%
Singapore 22.12 23.49 33.04 14.42 9.22 0.16%
Sudan 31.40 20.17 14.63 8.86 9.10 0.16%
Taiwan 12.08 9.87 8.97 8.07 8.44 0.15%
Norway 15.00 12.31 7.54 8.76 6.32 0.11%
Djibouti 0.00 14.79 11.19 8.56 6.28 0.11%
Others 336.40 187.24 209.98 249.40 261.02 4.59%
Total
6494.84 5855.06 5646.79 5740.97 5691.00 100.00%
 
Source: DGCI&S

FUTURE OUTLOOK:-
 

The Government of India had identified the Leather Sector as a Focus Sector under ‘Make in India’ programme
keeping in view of its immense potential for growth 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 of skilled manpower, innovative
technology, increasing industry compliance to international environmental standards, and dedicated support of the
allied industries, the Indian leather industry aims to augment the production, thereby enhance export, and resultantly
create additional employment opportunities.