Leather Industry Overview, Export Performance and 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. With an annual turnover of over US$ 7.5 billion, the export of leather and leather products increased manifold over the past decades and touched US$ 4.86 billion in 2011-12, recording a cumulative annual growth rate of about 8.22% (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$ 137.96 billion (2010) The major production centers for leather and leather products in India are located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Vellore, Pernambut, Trichy, Dindigul and Erode ; West Bengal Kolkata ; Uttar Pradesh Kanpur, Agra, Noida, Saharanpur; Maharashtra Mumbai ; Punjab Jallandhar ; Karnataka Bangalore ; Andhra Pradesh - Hyderabad ; Haryana - Ambala, Gurgaon, Panchkula, Karnal and Faridabad; Delhi; Madhya Pradesh Dewas ; Kerala Calicut and Ernakulam / Cochin 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 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 45.05% share in Indias total leather & leather products export. The Footwear product mix Gents 52%, Ladies 39% and Children 9% Leather Garments Sector Second largest producer with annual production capacity of 16 million pieces. Third largest global exporter. Accounts for 10.43% share of Indias total leather export Leather Goods & Accessories Sector including Saddlery & Harness - 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 23.44% share of Indias total export Product-wise Brands sourced from India: Footwear Leather Garments Leather Goods / Accessories

Acme, Ann Taylor, Bally, Charter Club, Clarks, Coach, Colehann, Daniel Hector, Deichmann, DKNY, Double H, Ecco, Elefanten, Etienneaigner, Florsheim, Gabor, Geoffrey Beene, Guess, Harrods, Hasley, Hush Puppies, Kenneth Cole, Liz Claiborne, Marks & Spencer, Nautica, Next, Nike, Cole Haan, Nunn Bush, Pierre Cardin, Reebok, Rockport, Salamander, Stacy Adams, Tommy Hilfiger, Tony Lama, Versace, Yves St. Laurent, Zara, Johnston & Murphy, Docksteps, Timberland, Armani, Geox, Diesel, Ted Baker, Lacoste, Kickers, Calvin Klein, Sioux, Brasher, Zegna, Massimu Dutti, Buggatti, Lloyd, Christian Dier, Salamander, Camper, Bata, Espirit, French Connection, Legero, Mercedez, H & M and many more famous brands

Armani, Zegna, Abercrombie & Fitch, Marco Polo, Mango, Colehaan, Andre Maarc, Guess Pierre Cardin, Tommy Hilfiger, Versace, DKNY, Liz Claiborne, Ann Taylor, Nautica, Kenneth Cole, Charter Club, Daniel Hector

Coach, Liz Claiborne, Harrods, Yves St, Laurent, Tommy Hilfiger, Etienne Aigner, Geoffrey Beene, Marks & Spencer, Guess, Next, Pierre Cardin, Prada, GAP, Levis, H & M, British Home Stores, Banana Republic, Furla, American Eagle Outfitters, Bracciliani, Walmart etc.

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

MNC Brands Sold in India

Aldo, Bally, Clarks, Ecco, Florshiem, Ferragammo, Hush Puppies, Lee Red Tape, Bata, Liberty, cooper, Lloyd, Marks & Spencer, Nike, Khadims, Lakhani, Metro, Nine West, Action New Balance, Reebok, Rockport, Stacy Adams, Tods, Geox , Louis Vuitton Indias export of leather and leather products for Five years (Value in Million $) 2007-08 Finished Leather Footwear Leather Garments Leather Goods Saddlery & Harness Total % Growth Source: DGCI&S % Share of Leather Products in Export Performance (2011-12) 807.19 1489.35 345.34 800.46 106.18 3548.51 15.99% 2008-09 673.37 1534.32 426.17 873.44 92.15 3599.46 1.44% 2009-10 627.95 1507.59 428.62 757.02 83.39 3404.57 -5.41% 2010-11 841.13 1758.67 425.04 855.78 87.92 3968.54 16.57% 2011-12 1023.21 2077.27 572.54 1088.09 107.60 4868.71 22.68%

% share of various countries in Indias Leather & Leather Products Exports (2011-12)

Major Markets: The major markets for Indian Leather & Leather Products are Germany with a share of 15.01%, UK 11.15%, Italy 10.85%, USA 9.02%, Hong Kong 7.38%, France 6.25%, Spain 6.08%, Netherlands 4.07%, Belgium 2.32%, China 2.54%, U.A.E.2.24%, Australia 1.39%, These 12 countries together accounts for nearly 78.30% of Indias total leather& leather products export. Indias Export of Leather & Leather Products to the European Union touched US$ 3116.52 mn in 2011 -12, accounting for a share of 64.01% in Indias total leather export trade of US$ 4868.71 mn.

(Value in million USD) 2007-08 COUNTRY Germany Italy UK USA Hong Kong Spain France Netherlands 493.34 490.77 417.64 311.21 280.97 216.07 198.52 134.75 508.45 461.56 413.24 359.22 237.72 219.18 221.33 148.77 491.28 398.56 456.59 296.37 251.53 219.13 255.29 137.10 575.38 455.76 505.20 348.13 325.20 247.99 280.04 155.43 730.77 528.39 542.99 439.27 359.51 295.81 304.23 198.29 15.01% 10.85% 11.15% 9.02% 7.38% 6.08% 6.25% 4.07% 2008-09 2009-10 2010-11 2011-12 % Share

U.A.E. Portugal Belgium China Australia Denmark Sweden Canada Korea Rep. South Africa Switzerland Austria Greece Saudi Arabia Japan Russia Indonesia Finland Ireland New Zealand Others Total

76.23 56.93 55.32 55.46 50.44 49.58 38.99 36.92 29.55 27.90 25.79 25.68 23.57 15.96 15.95 15.77 15.31 14.39 8.15 5.61 361.74 3548.51

85.79 48.17 54.77 49.96 55.76 60.12 38.03 35.29 26.17 22.45 26.07 27.22 17.82 19.28 20.24 12.01 13.45 15.52 6.44 5.46 389.97 3599.46

69.06 39.39 65.39 48.58 53.92 55.73 36.07 27.66 29.04 24.60 27.10 28.01 12.77 21.01 17.19 6.68 10.08 9.96 5.79 4.29 306.42 3404.57

74.27 39.62 80.89 75.48 51.81 57.75 31.36 29.32 31.31 32.14 25.02 27.01 10.05 22.14 21.74 19.99 20.15 14.57 5.36 5.98 399.45 3968.54

109.11 46.55 113.08 123.78 67.79 74.15 44.29 40.01 38.22 41.17 33.52 38.43 10.88 40.89 33.18 33.05 25.16 22.14 7.56 7.29 519.20 4868.71

2.24% 0.96% 2.32% 2.54% 1.39% 1.52% 0.91% 0.82% 0.78% 0.85% 0.69% 0.79% 0.22% 0.84% 0.68% 0.68% 0.52% 0.45% 0.16% 0.15% 10.68% 100.00%

Region-wise Export of Leather & Leather Products 2011-12

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 industrys 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 for overall one million people.