SECTORS AT THE INDIA PAVILION

Leather

AN INDUSTRY ON A FIRM FOOTING
India Is The Second-Largest Producer Of Footwear And Leather Garments In The World.

Expected to witness a growth of US$ 25 billion over the next decade.

India’s tryst with leather dates back to 1500 BC.

2nd largest producer and exporter of footwear and leather garments in the world.

Leather is among the top 10 foreign exchange earners for India.

  • Leather has been identified as a special sector in the National Manufacturing Policy which aims to enhance the share of the manufacturing sector to 25% of the GDP, along with the creation of 100 million jobs by the year 2025.
  • The Footwear Design and Development Institute (FDDI), with 55 training centres across India, has trained about 25,643 persons under the primary skill development training programme during 2018-19.
  • Indian Footwear, Leather & Accessories Development Programme (IFLADP), a special package for employment generation in the Leather and footwear industry, was launched with an approved outlay of US$ 371 million.
  • A mega leather cluster in West Bengal with an investment of US$ 64 million and an employment potential for around 7000 people has been granted approval. 

  • The government has allowed 100% Foreign Direct Investment through the automatic route. The leather, Leather Goods and Pickers industry attracted a cumulative FDI equity inflow of US$ 215.11 billion between April 2000 and September 2020.
  • The excise duty on leather footwear with a retail sale price of more than US$ 14.55 per pair has been reduced from 12 % to 6%.
  • Services by Common Effluent Treatment Plants (CETPs) have been exempted from taxation.
  • Interest rate has been reduced to 3% on Rupee Export Credit to MSME units and all footwear units under Interest Equalization Scheme. 

India is the second-largest footwear producer in the world, with an annual production of over two billion pairs. The domestic retail market absorbs more than 95 percent of this output. Additionally, leather is among the top ten foreign exchange earners for India, of which footwear constitutes 42 per cent of the total exports (2019-20).

The data mentioned above translates into a great opportunity: the Indian leather industry is fragmented, with 75 percent of production falling under the unorganized sector. This makes it fertile ground for organized capital to reap great dividends on investment. Some players have grasped this fact, as can be seen below:

  • Stanley Lifestyles Ltd, a Bengaluru-based maker of high-end leather products has raised its first round of equity funding from the Oman India Joint Investment Fund. OIJIF has spent US$ 24 million for a 26% stake in this company. Stanley supplies leather furniture to brands like IKEA, Toyota, Renault and Nissan.
  • Grupo Priority, a US$ 100 million Brazilian footwear firm has launched its flagship men’s shoe brand West Coast in India.
  • Hidesign, a Pondicherry-based company that offers a line of GI-tagged East India Leather products has gone global by expanding operations in 24 countries.

The Indian leather industry, with its sheer size, bounteous raw material, affordable labour and vast customer base, is well-poised to capture a significant portion of the global leather market. We invite you to be a part of the journey that leads to this feat.