A Project Report On Leather

A PROJECT REPORT ON
INTERNATIONAL MARKET RESEARCH ON LEATHER
Indian Leather Industry; Trend &Potential
Or International Market Feasibility for Indian Leather Industry
SUBMITTED IN PARTIAL FULFILLMENT FOR
“MASTERS OF INTERNATIONAL BUSINESS PROGRAMME”
OF NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES
BATCH 2020-22
SUBMITTED BY: TARUNA PRADHAN
CERTIFICATE
Leather
This is to certify that the project report on “INTERNATRIONAL MARKET
RESEARCH LEATHER” has been prepared out by Ms. TARUNA PRADHAN un-
der my supervision and guidance. The project report is submitted towards the partial
fulfillment of 2 year, full time Master of International Business.
Name & sign of faculty
NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

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ACKNOWLEDGEMENT
The success behind the completion of any good job is the support and the joint team
effort of a number of people. There are many persons, whose help & cooperation,
made this project successful.
My deepest sense of gratitude, profound respect and sincere thanks to my mentor
(faculty member NARSEE MONJEE INSTITUTE OF MANAGEMENT
STUDIES) my project guide, or his valuable assistance, keen interest and constant
motivation at each step of the project. It would not have been possible for me to
reach this stage without his support & guidance.

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DECLARATION
I TARUNA PRADHAN, student of MBA of NARSEE MONJEE INSTITUTE
OF MANAGEMENT STUDIES, hereby declare that the project report on
“INTERNATRIONAL MARKET RESEARCH ON LEATHER”
LEATHER EXPORTS is an original and authenticated work done by me. The
project was of 60 days duration. I further declare that it has not been submitted else-
where by any other person in any of the institutes for the award of any degree or
diploma.
Name of the student – TARUNA PRADHAN

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PREFACE
This basis for this research originally stemmed from my passion for developing bet-
ter methods of data storage and preservation. As the world moves further into the
digital age, generating vast amounts of data and born digital content, there will be a
greater need to access legacy materials created with outdated technology It is my
passion to not only find out, but to develop tools to break down barriers of accessi-
bility for future generations.
In truth, I could not have achieved my current level of success without a strong sup-
port group. First of all, my parents, for their support and understanding and sec-
ondly, my mentor, each of whom has provided patient advice and guidance through-
out the research process. Thank you all for your unwavering support.

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TABLE OF CONTENTS
1. INTRODUCTION…………………………………………15
2. OBJECTIVE OF THE STUDY…………………………..16
3. SCOPE OF THE STUDY…………………………………16
4. LIMITATION OF THE STUDY…………………………16
5. RESEARCH METHODOLOGY…………………………16
6. AGENCIES………………………………………………16-17
6.1. COUNCIL FOR LEATHER EXPORTS (CLE)
6.2. CENTRAL LEATHER RESEARCH INSTITUTE (CLRI)
6.3. FOOTWEAR DESIGN AND DEVELOPMENT INSTITUTE (FDDI)
6.4. NATIOANL INSTITUTE OF FASHION TECHNOLOGY (NIFT)
6.5. CENTRAL FOOTWEAR TRAINING INSTITUTE (CFTI)
7. PRODUCTION CENTRE………………………………18-22
7.1. TAMIL NADU
7.2. WEST BENGAL
7.3. UTTAR PRADESH
7.4. MAHARSHTRA
7.5. PUNJAB
7.6. KARNATAKA
7.7. ANDHRA PRADESH
7.8. HARYANA
7.9. DELHI
7.10. MADHAY PRADESH
7.11. KERELA
7.12. RAJASTHAN
7.13. JAMMU&KASHMIR
8. TOP FIVE INDIAN STATES EXPORTING LEATHER

PRODUCTS………………………………………………..23-25
8.1. TAMIL NADU
8.2. UTTAR PRADESH
8.3. WEST BENGAL
8.4. MAHARASHTRA
8.5. HIMACHAL PRADESH
9. LEATHER MAKING PROCESS……………………....25-30

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9.1. LIMING
9.2. DELIMING
9.3. BATING
9.4. PICKLING
9.5. TANNING
9.6. NEUTALIZATION
9.7. RETANNING
9.8. DYING
9.9. FAT LIQUIORING
9.10. DRYING
9.11. FINISHING
10.TYPES OF LEATHER…………………………………..31-33
10.1. FULL GRAIN OR TOP GRAIN LEATHER
10.2. CORRECTED OR EMBOSSED GRAIN
10.3. SPLIT SUEDE
10.4. NUBUCK SUEDE GRAIN
10.5. RECONSTITUTED,BONDED OR FIBRE LEATHER
11.INDIA’S LEATHER EXPORTS………………………..34-37

11.1. INDIA’S LEATHER EXPORTS DURING 2018
11.2. EXPORTS OF LEATHER AND PRODUCTS IN INDIA IN-
CREASED IN 2020 (APRIL-MAY)
11.3. INDIA’S EXPORT OF LEATHER AND LEATHER PRODUCTS
FOR 5 YEARS
11.4. INDIA’S EXPORTS OF LEATHER AND LEATHER PRODUCTS
TO VARIOUS COUNTRIES FOR LAST 5 YEARS
12.HIGHLIGHT OF PRODUCT SEGMENT OF INDIAN

LEATHER AND FOOTWEAR INDUSTRY…………...37
13.MAKE IN INDIA……………………………………….38-40
13.1. FINANCIAL SUPPORT
13.1.A. INDIAN FOOTWEAR,LEATHER&ACCESSORIES DEVELOP-
MENT PROGRAMME (IFLADP)
A) INTEGRATED DEVELOPMENT OF LEATHER SECTOR
(IDLS) SUB SCHEME
B) MEGA LEATHER,FOOTWEAR AND ACCESSORIES
CLUSTER (MLFAC) SUB SCHEME

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C) HUMAN RESOURCE DEVELOPMENT (HRD) SUB
SCHEME
D) LEATHER TECHNOLOGY, INNOVATION AND ENVI-
RONMEMTAL SUB SCHEME
E) PROMOTION OF INDIAN BRANDS INN LEATHER,
FOOTWEAR AND ACCESSORIES SECTOR SUB
SCHEME
F) ADDITIONAL EMPLOYMENT INCENTIVE FOR
LEATHER,FOOTWEAR AND ACCESSORIES SECTORE
SCHEME
G) ESTABLISHMENT OF INSTITUTIONAL FACILITIES
SUB SCHEME
13.2. FDI POLICY
14.PROMOTION OF LEATHER INDUSTRIES BY GOVERN-

MENT…………………………………………..40-41
10.1PROMOTION OF LEATHER INDUSTRY IN THE PAST 3 YEARS
10.2 GOODS AND SERVICE TAS (GST)
10.3 DUTY FREE IMPORTS OF INPUTS
10.4 INTEREST EQUILIZATION RATE
10.5 REMOVAL OF ANIMAL QUARANTINE CLEARANCE
10.6 REDUCTION OF BASIC CUSTOMS DUTY
15.SPECIAL CENTRAL GOVERNMENT PACKAGE FOR

FOOTWEAR AND LEATHER SECTOR…………………42
15.1. FOUR PROJECTS APPROVED IN TAMIL NADU UNDER
IFLADP
16.REFORMS UNDER FTP (2015-2020)………………………43
17.SKILL DEVELOPMENT……………………………………43

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18.OTHER INITIATIVES……………………………………...44
19.COMMMODITIES EXPORTS FROM INDIA WITH HS

CODE………………………………………………………44-70
19.1. LEATHER JACKETS 42031010
19.2. LEATHER SHOES FOR MEN 64035111
19.3. LEATHER FOOTWERA FOR WOMEN 64035112
19.4. LEATHER HANDBAGS FOR WOMEN 42022110
19.5. LEATHER WALLET AND PURSE 42023120
19.6. LEATHER BELT 42033000
19.7. LEATHER WATCH STRAPS 91132090
19.8. LEATHER HARNESS AND SADDLERY 42010000.
20.REGISTRATION CUM MEMBERSHIP CERTIFICATE

(RCMC)………………………………………………………71
20.1. ONLINE ISSUANCE OF RCMC
20.1.A.RENEWAL OF MEMBERSHIP AND NEW MEMBERSHIP
20.1.B.CONFIRMATION OF MEMBERSHIP WITH COUNCIL
21.DOCUMENTS REQUIRED,FEES AND CHARGES TO BE-

COME A CLE MEMBER………………………………72
22.LEATHER PARK…………………………………………..73
23.SCOPE TANNERIES IN INDIA………………………….74-75

23.1. TAMIL NADU
23.2. WEST BENGAL
23.3. UTTAR PRADESH
24.LICENSING POLICY……………………………………...76
25.SWOT ANALYSIS………………………………………77-78

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26.HUMAN RESOURCE REQUIREMENT IN THE LEATHER

INDUSTRY BETWEEN 2008&2022……………………78-80
26.1. LEATHER INDUSTRY IN ANDHRA PRADESH
26.2. LEATHER INDUSTRY OF ODISHA
26.3. LEATHER INDUSTRY OF PUNJAB
26.4. LEATHER INDUSTRY OF BIHAR
26.5. LEATHER INDUSTRY IN HIMACHAL PRADESH & UTTARAN-
CHAL
26.6. LEATHER INDUSTRY IN GUJARAT
26.7. LEATHER INDUSTRY IN MAHARASHTRA
26.8. LEATHER INDUSTRY IN KARNATAKA
26.9. LEATHER INDUSTRY IN GOA
27.ROLE OF FOREIGN INVESTMENT………………………81
28.CURRENT FDI REGULATIONS AND INDIA’S POSI-

TIONG …………………………….…………………….82
29.LEATHER GOODS MARKET- GROWTH,TRENDS AND

FORECASTS(2020-2025)…………………………………82-83
29.1. MARKET OVERVIEW
29.2. KEY TRENDS
30.CONCERNS AND CHALLENGES………………………….84
31.COMPETITIVE LANDSCAPE……………………………...85
32.OBJECTIVE OF THE STUDY……………………………...85
33.SCOPES OF THE STUDY…………………………………..85

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34.BIBLOGRAPHY
LIST OF TABLES AND FIGURES
TABLE 1 – LEATHER EXPORTS DURING APRIL-JUNE 2018…………..34
TABLE 2 – INDIA’S EXPORTS OF LEATHER AND PRODUCTS FOR 5

YEARS……………………………………………………………………………..35

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TABLE 3 - INDIA’S EXPORTS OF LEATHER AND LEATHER PRODUCTS
TO VARIOUS COUNTRIES FOR LAST 5 YEARS…………………………...35
TABLE 4 – MEMBER CATEGORY BASED ON EXPORT FOB VALUE….73
FIGURE 1- LEATHER PRODUCTION CENTRE…………………………….19
FIGURE 2- EXPORTS OF LEATHER AND PRODUCTS IN 2020…………35
FIGURE 2 - % SHARE OF LEATHER AND LEATHER PRODUCTS FY

2018-19…………………………………………………………………………….35
FIGURE 4 – LEATHER JACKET…………………………………………44-46
3.1 TOP EXPORTING MARKET FOR THE PRODUCT EXPORTED BY INDIA
3.2 TOP IMPORTING COUNTRIES IN THE WORLD
3.3 TOP EXPORTING COUNTRIES IN THE WORLD
FIGURE 5 – LEATHER SHOES FOR MEN………………………………48-49
FIGURE 6 – LEATHER FOOTWERA FOR WOMEN
FIGURE 7 – LEATHER HANDBAGS FOR WOMEN
FIGURE 8 – LEATHER WALLET AND PURSE………………..57

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8.3 TOP EXPORTING COUNTRIES
FIGURE 9 – LEATHER BELT

IN THE WORLD
FIGURE 10 – LEATHER WATCH STRAPS
10.1 TOP EXPORTING MARKET FOR THE PRODUCT EXPORTED BY

INDIA
FIGURE 11 – LEATHER HARNESS AND SADDLERY
11.1 TOP EXPORTING MARKET FOR THE PRODUCT EXPORTED BY

INDIA
FIGURE 12 - LEATHER GOODS MARKET, Y-O-Y, GROWTH RATE,

EUROPE, 2017-2019
FIGURE 13 – LEATHER GOODS MARKET- MARKET SIZE, BY REGION,

GLOBAL 2019
EXECUTIVE SUMMARY
Exports of a country play an important role in the economy. There has been a large
of number of studies exploring the export-led-growth hypothesis, which clearly
points out that export expansion are one of the prime determinants of economic
growth. Also, to enhance export, the country’s pattern of specialization is as impor-
tant as being open to international trade. So the structure of export of any nation

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helps us to know the different types of goods that a particular country exports and
also the composition of the goods in the country’s export basket.
The Leather sector in turn forms an important part of the manufacturing sector and
holds a prominent place in the Indian economy. This sector is known for its consis-
tency in high export earnings and it is among the top ten foreign exchange earners
for the country. The Global import of Leather and Leather Products has increased
from US$ 140 billion in 2007 to US$ 182.77 billion in 2011 and is expected to rise
to a staggering USD 245 billion in 2020. Also, among the different products im-
ported within the leather sector, world demand for leather footwear comprises of
70.64%. The Indian leather industry has come in a big way, in both the organized as
well as the unorganized sectors, and has been producing all sorts of goods from raw
hides to fashionable shoes.
The footwear sector is a very important segment of the leather industry in India and
is considered the engine of growth for the entire Indian leather industry. The SME
sector in India contributes about 60-65% in the leather segment and about 80% in
the leather footwear segment. While the scenario for India’s Leather footwear indus-
try has enhanced in view of deteriorating production of leather footwear in the West-
ern European countries, the industry in India has to go in for significant capacity en-
hancement in order to fully utilize this opportunity.
India’s export share to world import for leather footwear is hovering around 2-3%
only for the last decade and at the same time the share of its Asian counterparts is in-
creasing by leaps and bounds.
Leather industries have a prominent place in India. It gives a more employment op-
portunity. Especially women employees are high ( Women employment is predomi-
nant in leather products sector with about 30% share according to COUNCIL FOR
LEATHER EXPORTS.). It plays a unique position in Indian Economy but the indus-
tries run profit motive and earn more profit through the leather product clusters like
leather finished goods, leather garments leather footwear, saddler and harness.
Tamilnadu has more leather cluster region like AmburVaniyambadi, Pernambut, Ra-
nipet, Dindugul, Trichy. Theses cluster exports more leather products among other
states of India. So India earn more annual turnover through leather industry because
it has more region all over India and export more Leather products to all country.
Hence, an attempt has been made in this paper to highlight “Future Prospects of In-
dian Leather Industry.

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INTRODUCTION

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Introduction
Leather is one of the most widely traded commodities globally. The growth in de-
mand for leather is driven by the fashion industry, especially footwear. Apart from
this, furniture and interior design industries, as well as the automotive industry also
demand leather. The leather industry has a place of prominence in the Indian econ-
omy due to substantial export earnings and growth.
Leather exports from India comprise of raw-hide skins, finished leather, leather
goods, leather garments, leather footwear component, Saddlery and harness.
The Indian leather industry accounts for around 12.93 per cent of the world’s leather
production of hides/skins.
India’s export of Leather and Leather Products for the period April – August 19 – 20
touched USD 2276.39 Mn.
India is the 2nd largest producer of footwear, 2nd largest exporter of Leather Gar-
ments, the 5th largest exporter of Leather Goods and 3rd Largest Exporter of Saddlery
and Harness items. India’s leather industry is bestowed with skilled manpower, in-
novative technology, increasing industry compliance to international environmental
standards and the support of allied industries.
This paper analyses India’s export performance and changes in its composition over
time. The paper also identifies India’s main export commodities and investigates the
relevance and competitiveness of these commodities in major export markets. It fi-
nally highlights key policy changes which could impact local production as well as
international demand for these exports.
Over time, the export sector has grown to be a significant earner of foreign exchange
and a major contributor to India’s national income. Further, the performance of this
sector is highly dependent on domestic as well as global factors. As a consequence
of this, domestic as well as international economic policies have a bearing on the
overall export performance of India.
OBJECTIVES OF THE STUDY

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· To know the importance of the leather industry in international trade.
· To know about the export performance of leather industry in India.
· To estimate the future growth of leather industry in India.
· To explore the composition and direction of export-import and foreign ex-
change
· To study the various policy initiatives taken by government to boost exports
of leather.
· To examine the role of leather industries in the growth of our economy.
SCOPE OF THE STUDY

· India is the leading producers of leather. The export performance of leather
varies from one year to another year.
· This study throws a light on the export performance of leather in India. It

also depicts the budgeted future export performance of leather from India.
· Status of leather units, categorical size, source of raw material, , national and
international market, sources of credits, turnover, export and import of
goods, exports earning, composition and direction of exports and number of
workers, types of workers, welfare schemes for workers has been analyzed.
· Type of policy reforms for leather industry is covered in this study. The
study will be helpful for the policy makers to frame suitable policies for mi-
cro and medium scale leather manufacturer and traders.
LIMITATIONS OF THE STUDY

Due to current scenario (COVID19), secondary data was not available with any organiza-
tion. Whatever information was available in various reports, books, articles and website
that are only projected. Though all three sectors caters to local, national and international
market, the researcher restricted to study the problems related to outer infrastructure,
availability of inputs, exports and imports, branded and non-branded leather products.
RESEARCH METHODOLOGY

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Data are mostly collected through desk research of online resources, research pa-
pers, conference documents, and other publications. Data from Council from leather
export has been used. Annual report on MSMEs, Annual report of ministry of com-
merce and industry, various annual reports of State Financial Corporation, and vari-
ous financial institutions have been used. The data have been compiled from three
types of sources: published documents and reports, the World Wide Web and statis-
tical agencies. All data sources are listed at the end of this note and Web links are
provided wherever possible.
AGENCIES

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· Council for Leather Exports (CLE):
Service to Leather & Leather Products Exporters since 1984. The Council for
Leather Exports (CLE) is the single largest and Apex trade promotion organization
of the strong and rapidly growing Indian leather & leather products industry. CLE is
committed towards the overall development of Indian leather sector and achieve
higher export growth to enhance India’s share in global leather trade. CLE is func-
tioning under the aegis of Ministry of Commerce & Industry, Govt. of India.
· Central Leather Research Institute (CLRI):
Founded on 24 April 1948, the CSIR-Central Leather Research Institute is the

world’s largest R&D centre in leather. The original mandate of the institution, at the
time of inception, was to enable the Indian leather industry undergoes transforma-
tion from the supplier of raw hides and skins into a reliable source of value-added
leather products. That the Indian leather sector has undergone this transformation is
a result of the role played by the institute as an enabling catalyst.
· Footwear Design and Development Institute (FDDI):
Footwear Design & Development Institute was established by the Ministry of Com-
merce and Industry, Government of India in the year 1986. FDDI is playing a key
role in imparting education, facilitating the Indian industry by bridging the skill gap
in the areas of Footwear, Leather Accessory & life style product, and because of its

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continuous contribution towards nation building, FDDI has been granted the status
of “An Institution of National Importance” under the FDDI Act 2017.
· National Institute of Fashion Technology (NIFT):
Set up in 1986, NIFT is the pioneering institute of fashion education in the country
and has been in the vanguard of providing professional human resource to the textile
and apparel industry. It was made a statutory institute in 2006 by an Act of the In-
dian Parliament with the President of India as ‘Visitor’ and has fully fledged cam-
puses all across the country.
Central Footwear Training Institute (CFTI):
The Premier Institute of its kind in the country came into being in July, 1957, with
the assistance of Ford Foundation. The departmentally run Central Footwear Train-
ing Centre was converted into an autonomous Institution (Government of India, un-
der the land is fully equipped with state-of-the art machinery to impart training in
the modern methods of Footwear manufacturing. Ministry of Micro Small &
Medium Enterprises, Govt. of India) w.e.f. 1.14.1996 for better functional autonomy
and was renamed as "Central Footwear Training Institute" Chennai, (CFTI, Chen-
nai). The Institute is modernized with UNDP assistance under the National Leather
Development Programme .
PRODUCTION CENTER
The major production centers for leather and leather products in India are lo-
cated in the States of:

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FIGURE 1
· Tamil Nadu – Chennai, Ambur, Ranipet, Vaniyambadi, Vellore, Pernam-
but, Trichy, Dindigul and Erode
The State contributes 70% of the leather product output, and 40% of the leather ex-
ports of the country,” he added. Major production centers
of leather and leather products in Tamil Nadu are Chennai, Ambur, Ranipet,
Vaniyambadi, Pernambut, Trichy and Dindigul.
West Bengal – Kolkata

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There are about 500 tanneries in Bantala and they perform 22-25% of all the tanning
in India. The state of West Bengal is responsible for about 55% of In-
dia's leather exports. As of 2009, about 200 tanneries were relocated to the Cal-
cutta Leather Complex.
Uttar Pradesh – Kanpur, Agra, Noida, Saharanpur
In Uttar Pradesh sizable presence of leather work is somewhat higher than other
states. The leather industry is one of the oldest traditional industry in UP. By 1885,
Kanpur and Agra became major centers for production of leather.
· Maharashtra – Mumbai
Maharashtra has the potential to play a significant role in increasing India's share of inter-
national leather trade.
· Punjab – Jallandhar
In line with the National Trend, the leather industry is Punjab has also achieved
significant growth in the recent years. As per membership records of Council for
Leather Exports, the export of leather and leather products from Punjab in-
creased from Rs.216.97 crore in 2008-09 crore to Rs.342.30 crore in 2012-13.
The major export items are finished leather, leather footwear, leather goods and
leather garments. Jallandhar is a major production centre for finished leather,
leather goods, footwear and leather garments, contributing a share of more than
80% of the exports from Punjab.
· Karnataka – Bangalore

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.
The state took its initial steps when Sir Mr.Visvesvaraya established a Tannery Production
Centre to fulfill the requirements of leather processing. The leather industry in Kar-
nataka comprises of various segments, namely, tanning and finishing, footwear and
footwear components, leather garments, leather goods, etc.
· Andhra Pradesh – Hyderabad
The State is a major producer of hides and skins in India, contributing about 19
million pieces per annum, which constitutes about 10 per cent of the country’s
raw material. Most of this raw material goes to States like Tamil Nadu and West
Bengal for processing. The major clusters are Hyderabad, Bhimavaram, Cudda-
pah, Eluru, Karim Nagar etc. The State is having about 450 slaughter houses.
There are about 34 large and medium tanneries in the State producing about 40
million square feet of processed hides and skins per annum. Hyderabad and Nel-
lore are the key leather production clusters in Andhra Pradesh.
· Haryana – Ambala, Gurgaon, Panchkula, Karnal and Faridabad
· Delhi

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In the northern region the state of Punjab and national capital teiritory of Delhi are
two main producing locations. Over 50 per cent of the country's export of leather
garments is produced in Delhi. Likewise over 55 per cent India's total production of
non-leather footwear is manufactured in Delhi. Apart from this, leather footwear,
leather accessories arc also manufactured in this cluster
· Madhya Pradesh – Dewas
· Kerala – Calicut and Ernakulum/Cochin
· Rajasthan; Jaipur
The traditional leather workers of Rajasthan are from the raigar community –
one of the lowest castes in the social scale. They are involved in all the opera-
tions of the leather sub- sector in the state such as tanning (mainly vegetable
tanning), production of leather goods and sale of the goods in local markets.
· Jammu & Kashmir

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Kashmir leather industry has a potential to generate revenue in millions for the
state economy annually. On an average 3.5 million sheep and goat skins plus 1.2
million cattle hides are available in the Kashmir market every year.
TOP FIVE INDIAN STATES EXPORTING LEATHER PROD-

UCTS
Main leather exports comprise of skins and hides such as buffalo, cow, goat, sheep
Nappa and wet blue. Purses, leather gloves, handbags, garments, footwear, brief-
cases, and wallets are some of the products exported from India. Chennai in Tamil
Nadu, Kanpur in Uttar Pradesh, Mumbai in Maharashtra, Delhi, Agra, Sonepat, Lud-
hiana, Kolkata, Pune, Ernakulum and Calicut are the major production center in In-
dia. Let’s have a state-wise analysis of export of leather goods from India with trade
figures recorded in 2017.
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Tamil Nadu
Tamil Nadu is the largest leather producing state in India and net leather goods sup-
plier state of India, which recorded maximum shipments departed from the Chennai
Airport. It shared 51.98% value to total leather exports in 2017. This Indian state ex-
ported leather goods worth USD 428 million in the said year.
Animal Name: Leather goods manufactured from skins & hides of goat recorded
the highest export shipments from the Tamil Nadu state. From total 51.98% leather
export share of Tamil Nadu, leather of goat animal shared 23.25% value in 2017. In-
dia supplied goat leather goods worth USD 191 million in the said year.
Indian Port: The highest number of leather shipments departed from Tamil Nadu’s
Chennai Airport, which accounted 38.79% share in value during 2017. Leather man-
ufacturing companies in India shipped leather goods worth USD 319 million from
this port in the said year.
Foreign Country: The highest number of leather shipments from Tamil Nadu, India
departed to Hong Kong in 2017. From the state’s total share in value of 51.98%,
Hong Kong recorded 17.80% share in value. Tamil Nadu shipped leather goods
worth USD 146 million to Hong Kong in the said year.
Uttar Pradesh
Uttar Pradesh stood as the 2nd largest India state of leather exports. It shared
37.98% value to total India’s exports of leather products. This state supplied leather
goods worth USD 312 million in 2017.
Animal Name: Uttar Pradesh exported leather goods manufactured mostly from
buffalo animal in 2017, which accounted 35.61% shared in value. It recorded USD
293 million export value in the said year.
Indian Port: Among ports of Uttar Pradesh, Panki ICD recorded the highest leather
export shipments of USD 77 million recorded in 2017. It shared 9.39% value to total
India’s leather exports.
Foreign Country: Hong Kong, Italy, China, Vietnam, Malaysia, Spain, Indonesia
and Korea are biggest leather markets for Uttar Pradesh.
West Bengal
West Bengal is the 3rd largest leather exporting state of India. The leather exports
from this state stood at USD 32.29 million which represented 3.92% of the total
leather exports.

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Animal Name: The leather prepared from goat and cow skins are majorly exported
from West Bengal to other countries and recorded 2.34% and 1.26% share value of
total leather exports.
Foreign Country: Hong Kong, Italy, China, Vietnam and Korea are the largest
countries from where leather is exported from this state.
Maharashtra
Maharashtra is one of the largest leather exporting states of India. The leather ex-
ports from this state stood at USD 22.74 million and represented 2.76% value of the
total output.
Animal Name: From this state, leather prepared from rawhide skins of cow, goat,
sheep, buffalo, cow calf and bovine are exported.
Foreign Country: Hong Kong, Italy and China are biggest countries from where
leather is exported from this state.
Himachal Pradesh
Himachal Pradesh is also known for its leather export business. Leather exports
from this state recorded USD 10.89 million which represented 1.32% of the total
value.
Animal Name: Buffalo calf, buffalo, cow and cow calf are the animals from which
leather is prepared to export.
Foreign Country: The maximum leather shipments from this state are exported to
Hong Kong, China, Indonesia and Germany majorly.
Council for Leather Exports of India
The Council for Leather Exports (CLE) of India is an autonomous non-profit organi-
zation, which is entrusted with export promotion activities of leather goods and the
development of the Indian leather industry. Around 3.500 companies who are manu-
facturing/exporting leather and leather products are members of the Council.
LEATHER MAKING PROCESS

Leather making constitutes the most important activity of leather industry in India.
It is the activity which converts the raw hides and skins into finished leather which
is used for the production of the final leather products. The process of leather mak-
ing involves the following steps in sequential order:

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Leather
1. Liming
Liming is the process of hair loosening. Lime is used for the purpose and sodium
sulphide, sodium sulphidrate, dimethylamineet care also used for the liming process.
Lime is the most widely used for the purpose. The liming procedure also aims at the
removal of inter fibriallary proteins and natural facts.
2. Deliming
Deliming is the process of removing the alkaline chemicals present in relatively

large amount on the limed skins and hides which are called pelts. A number of
chemicals such as acids, acid salts and amonium salts are used for this process. The
extent to which deliming should be carried out depends upon the type of leather to
be produced. Fully delimed pelts produce softer leather, while for firmer and harder
types, complete deliming is not desired.
3. Bating
The delimed hides and skins contain non leather making constituents such as de-
graded proteins, color pigments, grease and lime soap etc. bating is the process of
making the grain surface of hides and skins clean, smooth and fine and to give the
finished leather its soft pliable and stretchy feel. It is the process of removing non
leather making constituents such as degraded proteins, color pigments, grease lime
soap etc. contained in the delimed hides and skins. The bating agent used in the bat-

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Leather
ing process includes enzymes such as trypsin, pepsin, lipase, amylase etc. and also
synthetic bate such as oropon. Bating may be done either in paddle or drum.
4. Pickling
Pickling is the process of treating the delimed and bated pelts in acid-salt pickle
liquor. In the process they absorb acid which is partly used to neutralize the free al-
kalinity and to combine chemically with collagen. The result of pickling process is
that the pelts in an acid environment are ready to accept chrome tanning agents.
Pickling also helps to preserve the pelts either for tanning at a later stage or for ex-
port and the skin can be easily sorted for production of different types of leather.
5. Tanning
Tanning is the process of conversion of putrescible animal skins or hides into stable
and non putrefiable commercial product leather. The two main tanning agents are
vegetable tanning and chrome salts. In the former process raw hides and skins are
treated in water containing tanning extracts from plant leaves, bark, fruit and roots.
Chrome tanning, on the other hand, involves a process in which pickled hides and
skins are first acidified with sulphuric acid and common salt to allow the tanning
agent to penetrate. Later, the pelts are treated with solutions of basic chromium salts.
Tanning, thus, converts the pelts into semi finished leather through the wet blue and
crust stages in the case of chrome tanning and through East India in vegetable tan-

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Leather
ning. Tanning is one process in which India possesses considerable traditional ex-
pertise.
6. Neutralization
It is the process of de-acidification of chrome leather using neutralizing agents such

as sodium bi-carbonate, sodium or calciumformate or syntans. The purpose of neu-
tralization is to reduce the excessive positive charge of acid present in leather to a as
low a degree as possible so that in the subsequent processes the semi-finished
leather is not disturbed in any manner.
7. Retanning
Retanning process is carried out in order to make up for variations in thickness and
to level out surface defects of leather by employing appropriate Retanning agents
such as vegetable extracts and syntans and resin tanning agents. Retanning is done
only on chrome-tanned leather.

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Leather
8. Dying
Dying is the process of giving suitable shades of different colors to the leather. The
different types of dye stuff employed in leather dying include anionic dyes, pre-met-
alized dyes. Chrome-mordent dyes and 64 reactive dyes. There are various methods
to carry out dying. Dying is important since it enhances the value of finished leather
in the national and international market.
9. Fat liquoring
The main purpose of fat liquoring is to coat the fibers and fibrils of leather with thin
layers of oil there by imparting a certain degree of softness as well as water proof-
ness. Some of essential physical characteristics of leather like tensile strength, aber-
ration resistance etc. are increased perceptibly by fat liquoring.

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Leather
10. Drying
Drying is an operation which removes water from leather. Drying performs an im-
portant function in the making of good leather. Drying is mainly done by toggle dry-
ing past drying vacuum drying. Drying sets the stage for the preparation of finished
leather.
11. Finishing
It is the final stage of the entire process of leather making. Finishing is the process
of providing the leather surface with a protective coat to prevent penetration of ex-
cessive moisture and dirt and also safeguard it from damages caused by rubbing and
scuffing. This protective coating while upgrading its quality and improving its aes-
thetic 65 appeal also imparts the desired color and level appearance to the leather.
There are various finishing agents with divergent properties applied in several coats.
There are also different types of finishes designated according to the composition of
finishing agents, or the application technique employed for the finishing effect ob-
tained. The leather after the finishing process becomes a major and important raw
material for the manufacturing of various products such as leather goods, shoes, gar-
ments etc.

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Leather
LIFECYCLE STAGES OF LEATHER

Page 33
Leather
DIFFERENT TYPES OF LEATHER

1. Full Grain or Top Grain Leather – (” the best)
This is the upper layer of a hide which is split into layers by a splitting machine to
various thicknesses. This outer layer will show natural scars and hair cell patterns if
left as uncorrected natural grain. The thickness can vary depending on the gauge set
at the time of splitting and the application. Thereafter the hides can be colored &
given various protective finishes. Whether produced for Upholstery, Gar-
ment, Shoe or Saddlery, these are the best types of leather as they are the strongest
and most durable and valuable layer of hide.
2. Corrected or Embossed Grain – ( ” 2nd best , full grain)

Hides which have an excessive amount of scratches or scars are further processed by
“correcting” the natural grain of a Full Grain skin. After splitting to the required
thickness, this natural grain is buffed or sanded and replaced with an embossed grain
and finish to simulate various hair cell patterns. The resulting effect will look flaw-
less with no natural scars showing, but this is no longer the real or natural grain. The
original feel or hand of the natural skin and durability is also reduced with a syn-
thetic grain and finish.
Many applications for shoe and handbag leather are embossed with unique exotic
prints to simulate the look as well. This process is utilized in many Garments and
Upholstery while still represented as “full grain leather” which technically it is that
layer.

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Leather
3. Split Suede – (“functional and inexpensive leather hides”)
The second layer or lower layer of the skin left after removing the Full Grain layer is
the Split Suede and will be suede on both sides. These types of leathers also will
come in various thickness depending on application. As this is a byproduct of hide
tanning it is less costly and therefore utilized in products where Full Grain is not re-
quired such as tool pouches, moccasins, suede garments etc.. This layer of the skin
can also be further processed by the application of a synthetic finish and hair cell to
one side of the suede to create an artificial look of Full Grain leather, known as “fin-
ished split” hide. This is used extensively in lower cost furniture and garments and
represented as “Genuine Leather” which technically it still is although it may look
like something it is not.
4. Nubuck Suede Grain – (“look but don’t touch – very sensitive leather”)
This Full Grain layer of the skin is given a suede effect by lightly sanding the natural
grain to open the hair cell and results in a velvety suede feel. This is also correcting
imperfections in the natural grain and although soft to the touch, it is a sensitive ef-
fect. Care must be taken against soiling or staining as it is very difficult if not impos-
sible to clean afterward. This effect is utilized in many garments and Upholstery
products.
5. Reconstituted, Bonded or Fiber Leather – (“Recycled, particle board”)

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Leather
Here leather remnants and scraps from garment and shoe factories are ground up and
recycled. In these types of leather the fiber particles are bonded with adhesive into a
fabric followed by the application of a synthetic grain, hair-cell pattern and finish.
This material will have suede back and looks of smooth Full Grain leather, while it
is essentially Particle board leather. As it is comprised of at least 51% leather fiber,
it is represented as “Genuine leather” and utilized in many low priced garment and
upholstery finished products.
LEATHER EXPORTS
In India, the leather is prepared from the raw-hide skin of different animals like buf-
falo, goat, cow and sheep. Majorly, buffalo skin and goat skin are used to make
leather products that are exported to the other countries. It is recorded that from total
leather exports 40 percent of buffalo and 30 percent of goat rawhide skins are used
for leather.
As per the official data, the exports of leather and leather products for April-Jun
2018 have touched USD 1420 million. Top 20 countries with highest share in Indian
leather exports during April – June 2018 are as follows:
Ex-
ports
during
Apr-
Jun
2018 14.
(Mn) U.S.A. 66

Page 36
Leather
10.
159.39 U.K. 05
5.1
S99.78 FRANCE 5
4.6
71.59 SPAIN 3
3.0
64.24 CHINA 9
2.2
43.38 POLAND 3
1.4
26.71 BELGIUM 7
1.3
19.97 AUSTRALIA 6
1.1
16.46 PORTUGAL 6
1.1
16.18 MALAYSIA 4
The major markets for Indian

Leather and Leather Products are
USA with a share of 14.66 percent,
Germany 11.22 percent, UK 10.05
percent, Italy 7.03 percent, France
5.15 percent, UAE 5.04 percent,
Spain 4.63 percent, Hong Kong 4.52
percent, China 3.09 percent, Nether-
lands 3.05 percent, Poland 2.23 per-
cent and Vietnam 1.88 percent.
These 12 countries together accounts
for nearly 73 percent of India’s total
leather and leather products export.
European Union collectively ac-
counts for 52 percent of India’s total
export of leather and leather products
14.59
Table 1

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Leather
EXPORTS OF LEATHER & PRODUCTS IN INDIA INCREASED
TO 8.04 INR BILLION IN MAY FROM 1.70 INR BILLION IN
APRIL OF 2020
Figure 1
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 Goods1452.83 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%
Table 2
% SHARE OF LEATHER & LEATHER PRODUCTS FY 2018-19

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Leather
Figure2
INDIA’S EXPORT OF LEATHER & LEATHER PRODUCTS TO

VARIOUS COUNTRIES FOR LAST 5 YEARS.
(Value in million USD)

%Share of
COUNTRY 2014-15 2015-16 2016-17 2017-18 2018-19
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%

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Leather
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 Repub-
22.52 10.45 9.34 11.91 10.52 0.18%
lic
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%
Page 40
Leather
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%
Table3
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.
MAKE IN INDIA

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Leather
✓ FINANCIAL SUPPORT
Indian Footwear, Leather & Accessories Development Programme (IFLADP)

The Central Government has approved a special package for employment generation
in leather and footwear sector. The package involves implementation of Central Sec-
tor Scheme "Indian Footwear, Leather & Accessories Development Programme"
with an approved expenditure of Rs. 2600 crore over the three financial years from
2017-18 to 2019-20. The scheme would lead to development of infrastructure for the
leather sector, address environment concerns specific to the leather sector, facilitate
additional investments, generate employment and increase production. Enhanced tax
incentive would attract large scale investments in the sector and reform in labour
law, in view of seasonal nature of the sector, will support economies of scale.
Government has approved Rs. 328.43 crore for upgradation of 9 Common Effluent
Treatment Plants (CETPs) for leather industry in Tamil Nadu and Rs. 129.62 crore
for upgradation of seven Footwear Design and Development Institute (FDDI) cen-
ters into Centers for Excellence (CoEs) and has given in-principle approval for set-
ting up of Mega Leather, Footwear and Accessories Clusters (MLFACs) at Bantala,
Kolkata. A target for providing primary skill development training to 1,40,000 un-
employed persons and skill upgradation training to 20,000 workers during each year
2018-19 and 2019-20 has been assigned under Human Resource Development
(HRD) sub-scheme of IFALDP.
During 2017-18, primary skill development training has been provided to 94,232
unemployed persons in leather & footwear sector and of them 71,125 trainees have
been provided placement in the industry during 2017-18 under Human Resource De-
velopment (HRD) sub-scheme of IFLADP. Further, 25,643 persons have been
trained under primary skill development training programme during 2018-19.
Under the Indian Footwear, Leather & Accessories Development Programme
(IFLADP), the following assistance is provided:
· Integrated Development of Leather Sector (IDLS) sub-scheme: IDLS sub-

scheme incentivizes investment and manufacturing including job creation by
providing backend investment grant/subsidy at 30% of the cost of new Plant and
Machinery to Micro, Small & Medium Enterprises (MSMEs) and at 20% of the

Page 42
Leather
cost of Plant and Machinery to other units for Modernization /technology upgra-
dation in existing units and also for setting up of new units.
· Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-

scheme: 50% grant with a ceiling of USD 19.23 Mn based on size is provided.
This is mainly for the establishment of Mega Leather Clusters to boost infra-
structure facility and support services for production and export. The MLFAC
sub-scheme provides infrastructure support to the Leather, Footwear and Acces-
sories Sector by establishment of Mega Leather, Footwear and Accessories Clus-
ter. Graded assistance is provided up to 50% of the eligible project cost, exclud-
ing cost of land with maximum Government assistance being limited to Rs. 125
crore.
· Human Resource Development (HRD) sub-scheme: Assistance for Placement

Linked Skill Development training to unemployed persons is provided - USD
230 per person, for skill up-gradation training to employed workers - USD 76
per employee and for training of trainers - USD 3,076 per person. The Footwear
Design and Development Institute (FDDI) have established itself as the premier
training institute for the provision of skilled manpower in the leather industry. It
has 55 training centers 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. HRD sub-scheme provides
assistance for Placement Linked Skill Development training to unemployed per-
sons at Rs. 15,000 per person, for skill up-gradation training to employed work-
ers at Rs. 5,000 per employee and for training of trainers at Rs. 2 lakhs per per-
son.
· Leather Technology, Innovation and Environmental sub-scheme: Under

this sub-scheme, assistance is provided for upgradation/installation of Common
Effluent Treatment Plants (CETPs) at 70% of the project cost. The sub-scheme
also provides for support to national level sectored industry council/ association
and support for preparation of vision document for Leather Footwear and Acces-
sories Sector.
· Promotion of Indian Brands in Leather, Footwear and Accessories Sector

sub-scheme: Eligible units are approved for Brand Promotion. Government as-
sistance is limited to 50% of total project cost subject to a limit of USD 461,538
for each brand, annually for 3 years.
· Additional Employment Incentive for Leather, Footwear and Accessories

Sector scheme: Employers contribute 3.67% to employee’s provident fund for
all working in the leather, footwear and accessories sector. The employees are

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Leather
enrolled in Employees' Provident Fund Organization (EPFO) for first 3 years of
their employment.
· Establishment of Institutional Facilities sub-scheme: The sub-scheme pro-

vides assistance to Footwear Design & Development Institute (FDDI) for upgra-
dation of some of the existing campuses of FDDI into "Centers of Excellence"
and establishing 3 new fully equipped skill centers alongside the upcoming
Mega Leather Cluster.
✓ FDI POLICY
· 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.
· The Leather industry in India is de-licensed, facilitating expansion on modern
lines with state-of-the-art machinery and equipment.
PROMOTION OF LEATHER INDUSTRIES BY GOVERNMENT
The following measures have been taken by the Government for promotion of
leather industry in the past three years:
1. Central sector scheme ‘Indian Footwear, Leather & Accessories Development
Programme’ is under implementation for the period 2017-18 to 2019-20. The
scheme aims at development of infrastructure for the leather sector, address en-
vironment concerns specific to the leather sector, facilitate additional invest-
ments, employment generation and increase in production. Details of the Indian
Footwear, Leather & Accessories Development Programme are enclosed as An-
nexure.
2. As per inputs received from Department of Commerce, following steps have
been taken for export promotion during last three years:
3. Merchandise Exports from India Scheme (MEIS): 2% across the board enhance-
ment of duty credit scrip under Merchandise Exports from India Scheme (MEIS)
Page 44
Leather
for shipments made from 1.11.2017. Accordingly, notified leather products and
footwear are now getting 5% MEIS scrip while finished leather is getting 4%
(some categories of finished leather are getting 5%).
(ii)Goods and Service Tax (GST) Rates for following leather industry related
items have been reduced:
a. Reduction of GST rate from 12% to 5% for finished leather and composition
leather from November 15, 2017
b. Reduction of GST on job work for manufacturing leather goods and
footwear from 18% to 5% from January 25, 2018
c. Reduction of GST on Common Effluent Treatment Plants services from 18%
to 12% from January 25, 2018
d. 5% concessional GST extended to footwear having a retail sale price up to
Rs. 1000 per pair from 27th July 2018, which was earlier available for
footwear with retail sale price up to Rs.500/-.
e. GST reduction on Slide Fasteners and Parts of Slide Fasteners (used as in-
puts) from 18% to 12% from 27th July 2018.
f. Reduction of GST rate from 28% to 18% for leather products, leather gar-
ments, leather chemicals from November 15, 2017
iii. Duty Free Import of Inputs: Enhancement of duty free limit (Basic Cus-
toms duty exemption) for import of critical import by manufacturer ex-
porters of footwear and other leather products from 3% to 5% of Free on
Board (FOB) value of exports in the previous year, as announced in Union
Budget 2017-18.
iv. Interest equalization rate was enhanced from 3% to 5% for Micro Small
and Medium Enterprises units from November 2, 2018 on pre-shipment
and post-shipment rupee export credit.
v. Removal of Animal Quarantine clearance for most of the categories of fin-

ished and crust leathers imported into India as notified vide Gazette Noti-
fication No. 5758 (E) dated 16th November 2018 issued by Department of
Animal Husbandry, Dairying and Fisheries (DAHD&F).
vi. In order to promote Green Tanning, the Union Budget 2017-18 announced
the reduction of Basic Customs Duty on Vegetable Tanning Extracts
namely Wattle extract [3201 20 00] and Myrobalan fruit extract [3201 90
20] from 7.5% to 2.5%,.
SPECIAL CENTRAL GOVERNMENT PACKAGE FOR FOOTWEAR AND

LEATHER SECTOR

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Leather
FOUR PROJECTS APPROVED IN TAMIL NADU UNDER IFLADP

The Central Government has approved a special package for employment generation
in leather and footwear sector. The package involves implementation of Central Sec-
tor Scheme - Indian Footwear, Leather & Accessories Development Programme
(IFLADP) with an approved expenditure of Rs. 2600 Crore for 2017-20.
The scheme aims at development of infrastructure for the leather sector, address en-
vironmental concerns specific to the leather sector, facilitate additional investments,
generate employment and increase production. Enhanced Tax incentives will attract
large scale investments in this sector and reforms in labour laws taking into account
the seasonal nature of the sector will support economies of scale.
In a major boost to the leather industry in Tamil Nadu under the IFLADP four
projects with a total outlay of 107.33 crore have been approved by the Department
of Industrial Policy and Promotion (DIPP) to facilitate upgradation of infrastructure,
job creation and environmental sustainability.
The projects approved in Tamil Nadu are: upgradation of Tala Trichy Common Ef-
fluent Treatment Plant (CETP) at Trichy, Pallavaram CETP at Nagalkeni Chrompet,
and SIDCO Phase-I CEPT at Ranipet and Perundurai leather industries Eco Security
Pvt. Ltd. at Erode.
DIPP has also given in-principal approval for mega leather cluster at Bantala in
West Bengal. This will generate employment for around 7000 people and lead to an
investment of Rs. 400 to 500 crore.
The Leather Technology, Innovation and Environmental Issues sub-scheme under
IFLADP provides financial support at 70% of the project cost to leather clusters to
meet the prescribed pollution control discharge norms. This covers establishment,
expansion, upgradation of CETPs, developing secure landfills, common recovery
units, management of sludge and any other techniques for hazardous waste manage-
ment.
A total of 9 projects for CETP upgradation with a gross value of Rs. 469.18 crore
and GOI assistance of Rs.328.43 crore have already been approved under the sub-
scheme. These projects are under implementation.
REFORMS UNDER FOREIGN TRADE POLICY 2015-20

· 3% duty scrip under Merchandise Exports from India Scheme (MEIS) for noti-
fied leather products and footwear and 2% duty scrip for finished leather prod-
ucts for export to Group A and B countries.
· Zero duty Export Promotion Capital Goods Scheme (EPCG) implemented in
previous Foreign Trade Policy (FTP) has been retained in FTP 2015-20.
· Infrastructure Projects in Export Clusters under ASIDE2 Scheme: The Council
for Leather Exports (CLE) has been notified as a Central Agency for implement-
ing Infrastructure projects relating to Leather Sector across the country with fi-
nancial assistance from the Department of Commerce (DOC) under ASIDE
Scheme as well as from the State Government.

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Leather
· Zero import duty on hides & skins, semi processed as well as finished leather,
raw and tanned fur-skins.
SKILL DEVELOPMENT
The Indian government has put in place an array of measures for skill develop-
ment and skill upgradation of workforce in this sector.
• Under Indian Leather Development Programme, primary skill development train-

ing has been imparted through the Footwear Design and Development Institute
(FDDI).
• During FY 2014-15: 1, 38,608 trained and 82% placed • During FY 2015-16: 1,

44,000 trained and 80% placed
• During FY 2016-17: 1, 17499 trained out of a target of 1, 44,000 and 80% have
been placed as of January, 2017
• To enhance the institutional infrastructure, two new branches of Footwear Design

and Development Institute (FDDI), with assistance of INR 100 crore for each
branch, have been built in the Punjab (Banur) and Gujarat (Ankleshwar).
• Under National Skill Certification policy and Monetary Reward Scheme of the Na-
tional Skill Development Corporation and Pradhan Mantri Kaushal Vikas Yojna
(PMKVY), 60,359 youth have been trained for various job roles in leather and
footwear industry since July 2015.
Other Initiatives
• INR 765 Lakhs has been sanctioned by Department of Commerce under Market
Access Initiative scheme and INR 297.93 Lakhs under Marketing Development As-
sistance scheme for marketing programmes and activities during FY 2016-17.
• Approval provided for setting up Mega Leather Clusters at Kota Mandal, Nellore
district, Andhra Pradesh with a central government assistance of INR 125 crore. The
project is expected to generate employment for 20,000 people and leverage an in-
vestment of at least INR 500 crore in the first phase itself.

Page 47
Leather
COMMODITIES EXPORTS FROM INDIA WITH THEIR HS
CODE
1. Leather jackets: 42031010
4203Articles of apparel and clothing accessories, of leather or of composition

leather. India is the second largest exporter of leather garments: India is the
second largest global exporter, next only to Italy, with a global market share of
about 17%.
Merchandise Exports from India Scheme 3%

(MEIS):
GST Rate: 18%
Market Analysis:
India's exports represent 15.4% of world exports for this product, its ranking
in world exports is 2.
Top importing markets for the product exported by India

Page 48
Leather
Germany
USA
France
Italy
UK
Net
Swit
Ko-USA Spain
Fra
Spai
Italy
UK Ger
her-
zer-
ncerea 18.
n man Netherland
10.13.
land
land
0.834%
13.
22.
12%
04%
92% 0% y
3.0
0.5
49% Switzerland
4%17.
8%
67% Korea
Russian federation 3.6%
Figure 3.1
Top Importing Countries in the World of Leather Jacket

GERMANY
USA
FRANCE
ITALY
UK
HONG
RUS-GER- SPAIN
SWITZE KONG,
SIAN
MANY
SPAIN
RLAND
NETHER CHINA NETHERLANDA
8.25% 17.24%USA
FED-
5.55%
LANDA
UKERA-5.40%
17.24%
7.05% FRANCE SWITZERLAND
9.45%TION
ITALY
13.34%
5.40%
11.09% RUSSIAN FEDERATION
HONG KONG, CHINA
Figure3.2
Top Exporting Countries in the World of Leather Jacket

Page 49
Leather
ITALY
INDIA
PAKISTAN
UK
USA 4.63% FRANCE
SPAIN4.89% ITALY
5.02% 22.38% GERMANY
TURKEY
5.02% CHINA
CHINA TURKEY
6%
GERMANY SPAIN
9.52% INDIA
19.87% USA
UK
FRANCE
10.55%
PAKISTAN
11.70%
Figure 3.3
So, the markets with greatest potential for India’s exports are GERMANY, USA,
FRANCE, ITALY, SPAIN, UK, SWITZERLAND, etc. India has closest export
links with USA and GERMANY both. And also in world’s exports USA and GER-
MANY playing a main role in importing leather jackets from different countries all
over the world. On the other hand India is the second largest exporter of leather
jacket after Italy.
Duty Drawback rate
ITC-HS Description Duty Draw- Drawback Unit Drawback Drawback

Code back Code Description Rate cap per
unit in Rs.
42031010 Articles of 420301 Articles of Piece 4% 374
apparel and apparel and
clothing ac- clothing ac-
cessories, of cessories, of
leather or of leather or of
composition composition
leather: Arti- leather: Arti-
cles of ap- cles of ap-
parel: Jack- parel, made
ets and jer- of leather
seys

Page 50
Leather
42031010 Articles of 420301 Articles of Piece 4% 285
apparel and apparel and
clothing ac- clothing ac-
cessories, of cessories, of
leather or of leather or of
composition composition
leather: Arti- leather: Arti-
cles of ap- cles of ap-
parel: Jack- parel, made
ets and jer- of leather in
seys combination
with other
leather
❖ Leather footwear: 6403
Footwear with Outer Soles of Rubber, Plastics, Leather Or Composi-

tion Leather And Uppers Of Leather - Sports Footwear. India is the second
largest producer of footwear in the world.
2. Leather shoes for men: 64035111
India exported Leather-Shoe worth USD 1,086,674,033.51. United States of Amer-

ica is one of the largest buyers of Leather-Shoe from India followed by Germany
and United Kingdom which buy Leather-Shoe.

Page 51
Leather
Market Analysis
India's exports represent 13.1% of world exports for this product; its ranking in
world exports is 2.
UK
22.66%
USA
33.99%
GERMANY
15.29%
HUNGARY
CHINA
1.32%
1.65%
JAPAN
1.65%
NETHERLANDS
2.31% ITALY
FRANCE
5.17% 9%
SPAIN
7.15%
Figure 4.1
Top Importing Countries in the World of Leather Footwear

Page 52
Leather
USA
FRANCE
GERMANY
CHINA
SPAIN UK
SWITZERLAND
2.82%
2.95%
4.36%
NETHERLANDS USA ITALY
8% 26.79% POLAND
POLAND NETHERLANDS
7.95%
ITALY SWITZERLAND
8.21%
FRANCE SPAIN
UK 15.64%
CHINA
10.13%
GERMANY
13.46%
Figure 4.2
Top Exporting Countries in the World of Leather Footwear
ITALY
INDIA
FRANCE
MEXICO
SWITZERLAND
SPAIN
GERMANY
2.73% PORTUGAL
3.76%
UK 4.33%
4.78% ITALY POLAND
POLAND 33.37%
6.26%
PORTUGAL UK
7.74% GERMANY
MEXICO
10.59% SPAIN
INDIA
FRANCE14.92% SWITZERLAND
11.50%
Figure 4.3
Global sales from leather shoes exports by country in 2019 totaled US$57.4 billion. India is
the 2nd largest exporter of footwear in the world. Market with great potential of In-
dia’s exports is USA, UK, and GERMANY. India has closest exports link with USA
followed by UK, GERMANY, etc.
Merchandise Exports from India 3%

Scheme (MEIS):
Goods and Services tax
64 Footwear of sale value not exceeding Rs.1000 per pair 5%

640 Footwear with outer soles of rubber, plastics, leather or composition 18

Page 53
Leather
3 leather and uppers of leather %
Duty Drawback rate
ITC-HS Description Duty Draw- Drawback Unit Drawback Drawback

Code back Code Description Rate cap per
unit in Rs.
64035111 Footwear 640305 Footwear with Pair 3.30% 67
with outer outer soles of
soles of rub- rubber, plas-
ber, plastics, tics, leather or
leather or composition
composition leather and up-
leather and pers of leather:
uppers of Leather shoes
leather: for adults,
Other other than
footwear, boots and half
with outer boots
soles of
leather: Cov-
ering the an-
kle: All
leather shoes:
For men
64035111 Footwear 640305 Footwear with - 0.40% -

with outer outer soles of
soles of rub- rubber, plas-
ber, plastics, tics, leather or
leather or composition
composition leather and up-
leather and pers of leather:
uppers of Leather shoes
leather: for adults,
Other other than
footwear, boots and half
with outer boots, manu-
soles of factured by
leather: Cov- units operating
ering the an- under section
kle: All 65 of the Cus-
leather shoes: toms Act,
For men 1962

Page 54
Leather
3.Leather footwear for women: 64035112
India exported Ladies-Footwear worth USD 170,283,937.27. Somalia is one of

the largest buyers of Ladies-Footwear from India, followed by United Arab Emi-
rates and France.
Export Policy
ITC-HS Code ITC-HS Description Policy Unit Restriction
Footwear with outer Export Permitted

soles of rubber, plas- Freely
tics, leather or compo- *Note: Appendix 4
sition leather and up- Definition of Finished
pers of leather: Other Leather
64035112 Free -
footwear, with outer Goods Falling In More
soles of leather: Cov- Than One Chapter Of
ering the ankle: All ITC (HS) Classification
leather shoes: For General Notes to Ex-
women port Policy
· Merchandise Exports from India Scheme (MEIS)
MEIS Description MEIS Rate
For men 3

Page 55
Leather
·
· Goods & Services Tax
GST GS
ITC-HS HS T
Description GST Description
Code Cod Rat
e e
64 Footwear of sale 5%
value not exceeding
Footwear with outer soles of rub-
Rs.1000 per pair
ber, plastics, leather or composi-
6403511 tion leather and uppers of leather:
6403 Footwear with outer 18
1 Other footwear with outer soles of
soles of rubber, plas- %
leather: Covering the ankle: All
tics, leather or com-
leather shoes: For men
position leather and
uppers of leather
4. Leather hand bags for women: 42022110
Ladies Handbags is traded all around the world. There are almost 122 countries
and territories, which actively import Ladies Handbags from India.

Page 56
Leather
Market Analysis
India's exports represent 2.5% of world exports for this product, its rank-
ing in world exports is 7.

USA
UK
GERMANY
SPAIN
FRANCE
SWITZER
DENMARK
AUS-5.16%USA
LAND ITALY
TRALIA 3.25%
NETHER
ITALY 22.65%
5.83%
LANDS
8.30% NETHERLANDS
UK
8.07%
FRANCE 18.05%
8.41% AUSTRALIA
SPAIN
GERMANY
9.53%
10.76% DENMARK
SWITZERLAND
Figure 6.3
Top Importing Countries in the World of Leather Handbags
USA HONG KONG, CHINA
CHINA FRANCE
JAPANGERMANY
USA
5.83% 4.99%
SINGAPORE 16.92%
5.83%
KOREA,REPU ITALY KOREA,REPUBLIC OF
UK
BLIC OF HONG KONG,
6.80%
8.18% CHINA
16.23%
ITALY UK SINGAPORE
9.57% CHINA
FRANCE13.59%
12.07%
JAPAN GERMANY
Figure 6.4
Top Exporting Countries in the World of Leather Handbags

Page 57
Leather
ITALY
FRANCE
HONG KONG, CHINA
CHINA
VIETNAM
NETHERLANDS
HONG INDIA
KONG,SWITZEUK
SPAIN
INDIA
NETHE
VIET-
RLAND
2.03%
CHINA 2.37%
2.82%
RLAND SPAIN
NAM
CHINA
13.211.92%ITALY
FRANC
4.74%S
E 36.79
9.82%
%3.05% % UK
23.25
% SWITZERLAND
Figure6.5
So the markets with greatest potential for India’s exports are GERMANY, USA,
SPAIN, UK, etc. India has closest export links with USA and UK both. And also in
world’s exports USA and HONG KONG playing a main role in importing leather
handbags from different countries all over the world. On the other hand, India is the
seventh largest exporter of leather handbags.
Export Policy
TC-HS Code ITC-HS Description Policy Unit Restriction

Page 58
Leather
Trunks, suit-cases,
vanity-cases, execu-
tive- cases, brief-
cases, school satchels,
spectacle cases, binoc-
ular cases, camera
cases, musical instru-
ment cases, gun cases,
holsters and similar
containers; travelling-
bags, insulated food or
beverages bags, toilet
bags, rucksacks, hand-
bags, shopping-bags, Export Permitted
wallets, purses, map- Freely
cases, cigarette-cases,
tobacco- pouches, tool *Note: Appendix 4
bags, sports bags, bot- Definition of Finished
tle- cases, jewellery Leather
42022110 Free - Goods Falling In More
boxes, powder-boxes,
cutlery cases and simi- Than One Chapter Of
lar containers, of ITC (HS) Classifica-
leather or of composition
tion leather, of sheet- General Notes to Ex-
ing of plastics, of tex- port Policy
tile materials, of vul-
canised fibre or of pa-
perboard, or wholly or
mainly covered with
such m ateria ls or
with pa per: Hand-
bags, whether or not
with shoulder strap,
including those with-
out handle: With outer
surface of leather or of
composition leather:
Hand-bags for ladies

Page 59
Leather
· Duty Drawback
Unit Drawback Rate Drawback cap per unit
in Rs.
Piece 3.7% 169
Hand-bags for 3
ladies

GS
GS
T
ITC-HS T
Description HS GST Description
Code Rat
Cod
e
e

Page 60
Leather
420 Trunks, suit-cases, vanity- 18
Trunks, suit-cases, vanity- 2 cases, executive-cases, brief- %
cases, executive-cases, brief- cases, school satchels, spec-
cases, school satchels, spectacle cases, binocular cases,
tacle cases, binocular cases, camera cases, musical instru-
camera cases, musical instrument cases, gun cases, hol-
ment cases, gun cases, holsters and similar containers;
sters and similar containers; travelling bags, insulated
travelling-bags, insulated food or beverages bags, toilet
food or beverages bags, toilet bags, rucksacks, handbags,
bags, rucksacks, handbags, shopping bags, wallets,
shopping-bags, wallets, purses, map-cases, cigarette-
purses, map-cases, cigarette- cases, tobacco- pouches, tool
cases, tobacco-pouches, tool bags, sports bags, bottle-
bags, sports bags, bottle- cases, jewellery boxes, pow-
4202211
cases, jewellery boxes, powder-boxes, cutlery cases and
0
der-boxes, cutlery cases and similar containers, of leather,
similar containers, of leather of sheeting of plastics, of
or of composition leather, of textile materials, of vulcan-
sheeting of plastics, of textile ized fiber or of paperboard,
materials, of vulcanized fiber or wholly or mainly covered
or of paperboard, or wholly with such materials or with
or mainly covered with such paper [other than handbags
materials or with paper: and shopping bags, of cotton
Handbags, whether or not or jute]
with shoulder strap, includ-
ing those without handle:
With outer surface of leather
or of composition leather:
Hand-bags for ladies
5. Leather wallet and purse: 42023120
Leather Wallet is traded all around the world. There are almost 157 countries
and territories, which actively import Leather Wallet from India. The combined
value of total export is 273.94 USD million.

Page 61
Leather
Market Analysis

USA
GERMANY
UAE
UK
POLAND
FRANCE ITALY
AUSTRALIA
NETHER
2%
2.60%
3.35%
SPAIN
LANDS USA SPAIN
5.20%
ITALY 4.21% 32.59% NETHERLANDS
UK
7.31%
10.66% AUSTRALIA
UAE GERMANY FRANCE
14% 17.97%
POLAND
Figure 7.1
Top importing countries in the world for Wallet and Purse

JAPAN
USA
HONG KONG, CHINA
FRANCE
ITALY
SIN- CHINA SINGAPORE
GAPO GER-
JAPAN
UK 5.52%
MANY
RE
6.19%
KOREA, HONG USA
21.67% KOREA, REPUBLIC OF
5.79%
7.67% KONG, 13%
ITALY
REPUB-
9.56%
LIC CHINA
OF FRANCE UK
7.13% 12.38%
10.63%
GERMANY
CHINA
Figure 7.2

Page 62
Leather
Top Exporting countries in the world for Wallet and Purse
ITALY
FRANCE
INDIA
HONG KONG
CHINA
HONG SWITZ
NETHE
GER- VIETNAM
SIN-
VIET-
KONG ER-
MANY
FRANC
GAPO ITALY
RLAND
CHINA
INDIA
NAMLAND SINGAPORE
9.16%
8.27% E30.06
3.24%
10.17RE S
3.91%
1.79%
2.79%
27.04 %
3.58%
%
% GERMANY
NETHERLANDS
SWITZERLAND
Figure 7.3
and UAE, UK etc. India has closest export links with USA and GERMANY both.
And also in world’s exports USA and JAPAN playing a main role in importing
leather wallet and purse from different countries all over the world. On the other
hand India is the third largest exporter of leather wallet and purse.
Export Policy

Page 63
Leather
Trunks, suit-cases,
vanity-cases, execu-
tive- cases, brief-cases,
school satchels, specta-
cle cases, binocular
cases, camera cases,
musical instrument
cases, gun cases, hol-
sters and similar con-
tainers; travelling-
bags, insulated food or
beverages bags, toilet
bags, rucksacks, hand-
bags, shopping-bags, Export Permitted
wallets, purses, map- Freely
cases, cigarette-cases,
tobacco- pouches, tool *Note: Appendix 4
bags, sports bags, bot- Definition of Finished
tle- cases, jewellery Leather
42023120 Free - Goods Falling In More
boxes, powder-boxes,
cutlery cases and simi- Than One Chapter Of
lar containers, of ITC (HS) Classifica-
leather or of composition
tion leather, of sheet- General Notes to Ex-
ing of plastics, of tex- port Policy
tile materials, of vul-
canised fibre or of pa-
perboard, or wholly or
mainly covered with
such m ateria ls or with
pa per: Articles of a
kind normally carried
in the pocket or in the
handbag: With outer
surface of leather or of
composition leather:
Wallets and purses, of
leather

Page 64
Leather
· Duty Drawback
Drawback cap
Unit Drawback Rate
per unit in Rs.
Piece 3% 35
Wallets and purses, of 3

leather

GS
GS
T
ITC-HS T
Code Rat
Cod
e
e

Page 65
Leather
420 Trunks, suit-cases, vanity- 18
Trunks, suit-cases, vanity- 2 cases, executive-cases, brief- %
cases, executive-cases, brief- cases, school satchels, spec-
cases, school satchels, spectacle cases, binocular cases,
tacle cases, binocular cases, camera cases, musical instru-
camera cases, musical instrument cases, gun cases, hol-
ment cases, gun cases, holsters and similar containers;
sters and similar containers; travelling bags, insulated
travelling-bags, insulated food or beverages bags, toilet
food or beverages bags, toilet bags, rucksacks, handbags,
bags, rucksacks, handbags, shopping bags, wallets,
shopping-bags, wallets, purses, map-cases, cigarette-
purses, map-cases, cigarette- cases, tobacco- pouches, tool
cases, tobacco-pouches, tool bags, sports bags, bottle-
bags, sports bags, bottle- cases, jewellery boxes, pow-
4202312
cases, jewellery boxes, powder-boxes, cutlery cases and
0
der-boxes, cutlery cases and similar containers, of leather,
similar containers, of leather of sheeting of plastics, of
or of composition leather, of textile materials, of vulcan-
sheeting of plastics, of textile ized fiber or of paperboard,
materials, of vulcanized fiber or wholly or mainly covered
or of paperboard, or wholly with such materials or with
or mainly covered with such paper [other than handbags
materials or with paper: Arti- and shopping bags, of cotton
cles of a kind normally car- or jute]
ried in the pocket or in the
handbag: With outer surface
of leather or of composition
leather: Wallets and purses,
of leather
6. Leather belt: 42033000

Page 66
Leather
Belt Leather is exported from India majorly to USA, United Arab Emirates, Ger-
many, United Kingdom, and China. Export duty for Belt Leather is levied by the
government when the product is exported from India to other countries.
Market Analysis:
USA
UAE
GERMANY
UK
SAUDI ARABIA
MALAY
CHINA
FRANC NETHERLANDS
HONG
NETHER
SIA
UK 3.10%
KONG,E
GER-
SAUDI
LANDS
7.34% 2.41%
3.21% HONG KONG, CHINA
CHINA
MANY
ARABIA USA
3.67% 44.61%
3.56%
10.21%UAE
7.00% FRANCE
15% CHINA
MALAYSIA
Figure 8.1
Top importing countries in the world for Leather Belt

Page 67
Leather
USA
FRANCE
HONG KONG, CHINA
CHINA
HON
G GERMANY
GERKON
MANG, FRA UK
YCHIN NCE
KO-
NETH
JAPA
UK
9.46
ITALY A USA
13.5
REA, ITALY
7% NER-
26.2
% 11.0
6.92 RE-
11.1
LAN
6.50 6%
%% 2% 7%
PUB JAPAN
6%
DS
LIC
4.10
OF NETHERLANDS
%
3.95 KOREA, REPUBLIC OF
%
Figure 8.2
Top Exporting countries in the world for Leather Belt

ITALY
FRANCE
CHINA
HONG KONG, CHINA
SIN-
TAIPEI, GERMANY
NETHER
SPAIN
INDIA GAPO
CHINESE
LANDS INDIA
3.97%RE
1.75%
HONG5.37%
GERMANY 3.62%
1.75% ITALY SPAIN
KONG,
6.07% 41.59%
CHINA NETHERLANDS
CHINA
7.59%
11.45%
FRANCE TAIPEI, CHINESE
16.82% SINGAPORE
Figure 8.3
UAE, etc. India has closest export links with USA and GERMANY both. And also
in world’s exports USA and FRANCE playing a main role in importing leather belt
from different countries all over the world. On the other hand India is the sixth
largest exporter of leather belt.
Export Policy
Articles of apparel Export Permitted Freely

and clothing acces-
42033000 sories, of leather or Free - *Note: Appendix 4 Def-
of composition inition of Finished
leather: Belts and Leather
bandoliers Goods Falling In More

Page 68
Leather
Than One Chapter Of
ITC (HS) Classification
General Notes to Export
Policy
· Duty Drawback
Drawback cap per

Unit Drawback Rate
unit in Rs.
Piece 2.4% 23.3
Piece 2.1% 23.3
Belts and bandoliers 3

GS
GST
ITC-HS T
Code Rat
Code
e
Articles of apparel and 4203 Articles of apparel and cloth- 18%

4203300 ing accessories, of leather or of
clothing accessories, of

Page 69
Leather
leather or of composition composition leather [other than
0 leather: Belts and ban- gloves specially designed for
doliers use in sports]
7. Leather watch straps: 91132090
There are almost 13 countries and territories, which actively import Watch
Straps from India. India exported Leather-Watch-Strap worth USD
10,373,365.27. Switzerland is one of the largest buyers of Leather-Watch-Strap
from India, followed by Hong Kong and Philippines. Delhi Air, Bangalore Air,
Bangalore ICD, Madras Air are the main ports.
Market analysis
India's exports represent 0% of world exports for this product, its ranking
in world exports is 24.

Page 70
Leather
HONG KONG, CHINA SWITZERLAND
CHILE PHILIPPINES
USA UAE
VIETNAM
BAHRAIN
CANADA
SLO-2.49%
3.96%
3.96%
UAE
VAKIA
PHILIP
USA
5.43%
5.43% HONG SLOVAKIA CANADA
PINES
7.47% KONG,
7.47%
SWITZER CHINA
CHILE
LAND
9.95% 42.87%
10.97% BAHRAIN VIETNAM
Figure 9.1
Top Importing countries in the world for Leather Watch Straps
SWITZERLAND
HONG KONG, CHINA
CHINA
JAPAN
FRANCE
INDIA
GER-
BRAZIL
USA
THAI- 1%
MANY
2.59% THAILAND
3.57%
FRANCE
LAND 1.95%
5.84%
4.00% SWITZER USA
JAPAN
CHINA
8.00% HONG LAND
10.92% KONG, 43.14% BRAZIL
CHINA GERMANY
18.92%
INDIA
Figure 9.2
Top Exporting countries in the world for Leather Watch straps

HONG KONG, CHINA
CHINA
SWITZERLAND
FRANCE
ITALY
VIETNAM
MAU-
GER-
THAI
ITALY1%
RITIUS
MANY
LAND THAILAND
FRANCE4% 1%
SWITZER 4%1% HONG
10% GERMANY
LAND KONG,
10% CHINA MAURITIUS
CHINA 40%
29% VIETNAM
INDIA

Page 71
Leather
Figure 9.3
So, the markets with greatest potential for India’s exports are HONG KONG,
CHILE, SWITZERLAND, etc. India has closest export links with HONG KONG.
And also in world’s exports SWITZERLAND, CHINA, etc playing a main role in
importing leather watch straps from different countries all over the world. On the
other hand India is the 24th largest exporter of leather watch straps.
Export Policy
Export Permitted
Watch straps, watch Freely
bands and watch *Note: Goods Falling
bracelets, and parts In More Than One
91132090 Free -
thereof: Of base metal, Chapter Of ITC (HS)
whether or not gold-or Classification
silver-plated: Other General Notes to Ex-
port Policy
· Duty Drawback
Drawback cap per

Unit Drawback Rate
unit in Rs.
- 1.50% -

Page 72
Leather
·
Other 3

GS
GST
ITC-HS T
Code Rat
Code
e
Watch straps, watch bands and 9113 Watch straps, watch 18%
9113209 watch bracelets, and parts thereof: bands and watch
0 Of base metal, whether or not bracelets, and parts
gold- or silver-plated: Other thereof
·
8. Harness & Saddlery: 42010000
Saddlery and Harness, Of Any Material is exported from India majorly to Germany,
USA, United Kingdom, Netherlands, and France. India is positioned as 3rd
largest exporter of Saddlery and Harness to the world. Harness & Saddlery goods are be-
ing manufactured in Kanpur for more than 100 years.

Page 73
Leather
Market Analysis:
India's exports represent 8.8% of world exports for this product, its ranking in
world exports is 3.

USA
GERMANY
UK
NETHERLANDS
FRANCE
CANADA
ITALY
BELGIUM
SWEDEN 3% USA
2.48%
3% AUSTRALIA
4.63%
AUS- 24.49%
FRANCE
TRALIA
NETHER SWEDEN
8.80%
7%
LANDS GERMANY BELGIUM
10.38% 22.80%
UK
12.87% ITALY
CANADA
Figure 10.1
Top Importing countries in the world for Saddlery and Harness
USA
GERMANY
UK
FRANCE
NETHERLANDS
ITALY
BEL-
AUS- CANADA
JAPAN
NETHER 3.10%
GIUM
CANADTRALIA
4.72%
FRANCE
LANDS 3.51% USA JAPAN
A 4%
6.88%
5.67%
UK GER- 43.32%
5.53%
8.91%MANY AUSTRALIA
14.30%
BELGIUM
ITALY

Page 74
Leather
Figure 10.2
Top Exporting countries in the world for Saddlery and Harness
CHINA
GERMANY
INDIA
ITALY
NETHERLANDS
BELGIUM
VIETNAM
USA
UK2.73%
3.47% FRANCE
3.97%
FRANCE
4.09% CHINA
NETHER
4.58%
ITALY UK
LANDS
INDIA 47.96%
5.33%
10.90% GER-
4.71% USA
MANY
12.27% VIETNAM
BELGIUM
Figure 10.3
UK, etc. India has closest export links with USA and GERMANY both. And in
world’s exports USA and GERMANY playing a main role in importing leather Sad-
dlery and harnesses from different countries all over the world. On the other hand
India is the third largest exporter of leather Saddlery and harnesses.
Export Policy
Export Permitted
Saddlery and harness Freely
for any animal (includ-
ing traces, leads, knee *Note: Goods Falling
42010000 pads, muzzles, saddle Free - In More Than One
cloths, saddle bags, dog Chapter Of ITC (HS)
coats and the like), of Classification
any material General Notes to Ex-
port Policy

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Leather
· Duty Drawback
Drawback cap
Drawback Rate
per unit in Rs.
2.8% 71
1.9% -
1.1% -
1.1% -
1.1% -
MEIS Rate

GST GS
ITC-HS HS T
Description GST Description
Code Cod Rat
e e
Saddlery and harness for 4201 Saddlery and harness for 18

any animal (including any animal (including %
4201000 traces, leads, knee pads, traces, leads, knee pads,
0 muzzles, saddle cloths, sad- muzzles, saddle cloths, sad-
dle bags, dog coats and the dle bags, dog coats and the
like), of any material like), of any material
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Leather
RCMC CERTIFICATE: (Registration-cum-Membership Certificate)

• The Registration-cum-Membership Certificate (RCMC) is issued to an ex-
porter after he/she becomes the member of CLE.
• RCMC is valid for 5 years and subject to renewal every year.
• It has categorized its members on the basis of the export Freight on Board
(FOB) turnover value, namely,
➢ Associate Members – FOB value of exports below Rs. 15 lakhs.
➢ Ordinary Members – FOB value of exports above Rs. 15 lakhs.
ONLINE ISSUANCE OF RCMC
RENEWAL OF MEMBERSHIP AND NEW MEMBERSHIP FOR THE

YEAR 2020-21
For renewing your membership, it is mandatory to submit the following documents

online:
· – To furnish updated Proprietorship / firm and company profile details
· – To upload duly attested Bank Certificate of your export performance on FOB
realized basis for 2019-20
· – In case of no export during 2019-20, you need to mention as “NIL” export.
It may kindly be noted that without submission of renewal form and bank certificate,
you will not be allowed to reach payment gateway icon.
Confirmation of Membership with the Council:

· – The Council will scrutinize the application form submitted by the Member on-
line.
· – If all the details is found to be in order, an acknowledgement will be sent
through registered email ID along with unique roll number.
· – On receipt of the applicable Membership Fees, the Council will issue RCMC
duly renewed for 2020-21 through registered e-mail address of the Member
within 03 working days.

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· – If the Membership fee paid by you is found to be in short, the same shall be
collected before issue of Membership.
Members may kindly note the following important points:
· – Members are requested to compulsorily send an original copy of the Banker’s

Certificate duly certifying the export performance, in prescribed format to the
Council within 03 days of online submission of your membership renewal appli-
cation form.
· – As a mandatory requirement, the Council will be uploading the individual
RCMCs issued online in the DGFT’s server. Hence, we request you kindly to
ensure that the information furnished in the Membership Renewal Application
Form is thoroughly checked and validated before submission to the Council
since the information provided online construed to be self-attested data.
– The validity of Registration-cum-Membership Certificate (RCMC) is subject to re-
newal of membership every financial year. Hence, please renew your membership at
the earliest so that you may continue availing the following benefits / concessions/
schemes of Govt. of India, as applicable from time to time.
In the light of the above, Members are requested to visit the Council’s
website www.leatherindia.org and click the link “ MEMBERSHIP ” and choose
“ Renewal of Membership” of the sub-links and submit the Application Online
which will be available from 1st April, 2020.
DOCUMENTS REQUIRED, FEES AND CHARGES TO BECOME

A CLE MEMBER:
✓ An individual or a company manufacturing or trading leather and leather prod-
ucts can apply for the membership of the CLE. The applicant requires the fol-
lowing documents:
✓ Application form of CLE
✓ Application form for Registration-cum-Membership Certificate (RCMC)
✓ A self-attested copy of GST Registration
✓ A self-attached copy of the Import-Export Code (IEC) Number issued by the
concerned authority

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Leather
✓ In case the exporter is in manufacturing, a self-attested copy of registration un-
der Department of Industries and Commerce. A Udhyog Aadhaar Memorandum,
Industrial License, IEM certificate etc. are examples of the documents that are
considered valid
✓ A copy of the export performance of last 3 years duly signed by a banking au-
thority
✓ A membership fee is supposed to be paid through a Demand Draft or an Account
Payee Cheque drawn in favor of “Council for Leather Exports”.
There are different categories based on the export FOB value. The following
schedule explains the different segments:
Member category based

on previous year export Entrance fee Annual Fees GST 18%
Total
FOB value
Associate Members:
Below Rs.15 lakh (G) Rs.3500 Rs.5000 Rs.1530 Rs.10030
Ordinary Members:
Above Rs.15 lakhs &
Rs.5000 Rs.7000 Rs.2160 Rs.14160
upto 1 crore (F)
Above Rs. 1 crore & upto
Rs.5000 Rs.15000 Rs.3600 Rs.23600
5 crore (E)
Above Rs. 5 crore & upto
Rs.5000 Rs.20000 Rs.4500 Rs.29500
10 crore (D)
Above Rs. 10 crore &
Rs.5000 Rs.30000 Rs.6300 Rs.41300
upto 50 crore (C)
Above Rs. 10 crore &
Rs.5000 Rs.40000 Rs.8100 Rs.53100
upto 100 crore (B)
Above Rs. 100 crore (A) Rs.5000 Rs.50000 Rs.9900 Rs.64900
Table 4
LEATHER PARK
Under the leather park package, Chennai is going to have two parks — one for
footwear and the other for components. An exclusive park for tanneries is also com-
ing up at Nellore, a leather goods park within the upcoming Calcutta Leather Com-
plex in Kolkata and another component park in Agra. The leather goods park project
of Indian Leather Products Association (ILPA), coming up on approximately 60
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Leather
acres of land inside the Calcutta Leather Complex (CLC) at Bantala in east Kolkata,
is expected to be completed by 2008-09. The facility will put Kolkata on the interna-
tional leather goods buyers' map. Ten leather product manufacturing companies, in-
cluding Liberty Shoes and Irving Leather Company of the US besides a couple of
Chinese companies, are keen to set up units in the leather park proposed to be set up
in Nellore district.
SCOPE OF TANNERIES IN INDIA

The Indian market has been fragmented with about 2200 tanneries of which 2100
are small scale units and over 8000 leather product manufacturing units. The tanning
industry is concentrated in three states viz. Tamil Nadu, West Bengal and Uttar
Pradesh. Of the total number of tanneries in India, Tamil Nadu accounts for 52%,
West Bengal 23% and U.P 12%. The other important states are Maharashtra, Andhra
Pradesh and Punjab. Looking from the angle of scale of operations, the tanning in-
dustry largely exists in the small-scale sector with a share of 93% in the total num-
ber of tanneries in the organized sector.
Tamil Nadu
Tamil Nadu has a dominant presence in the leather and leather based industries. The
tanning industry in India has a total installed capacity of 225 million pieces of hide
and skins of which Tamil Nadu alone contributes to an inspiring 70%. Leather in-
dustry occupies a pride of place in the industrial map of Tamil Nadu. Tamil Nadu
enjoys a leading position with 40% share in India’s export. It currently employs
about 2.5 million persons Leather exports by the end of the year 2000-2001 were Rs.
9000 crores. This translates into exports worth nearly Rs. 102.6 billion (1.844 Bil-
lion Euros) from Tamil Nadu - given the major share it has traditionally enjoyed.
Govt. of Tamil Nadu offers a special capital subsidy to further encourage the leather
industry. TALCO-a state govt. organization is setting common effluent treatment
plants in leather industry clusters. A recent study by the National Council of Applied

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Leather
Economic Research (NCAER) made a comparison of the incentive packages of all
Indian States which reveals that Tamil Nadu offers the most attractive package
among industrialized States of India. Tamil Nadu ranks II at the all India level in
terms of attractiveness of incentives.
West Bengal
West Bengal is one of the country's top states for export of finished leather goods.
70% of the country's leather goods are exported from West Bengal. Bata India Lim-
ited is India's largest manufacturer and marketer of footwear products. Bata India
sells 60 million pairs of footwear products per year throughout India and in overseas
markets such as USA, UK, Europe, Middle East and Far East. Its registered office is
at S.N.Banerjee Road, Kolkata. It has 5 plants near Kolkata. Main plant is located in
Batanagar near Kolkata. Bata India secures its leather supply from two tanneries in
Mokamehghat (Bihar) and Batanagar (West Bengal). The number of manufacturing
industries engaged in leather products is 538. West Bengal Leather Industrial Devel-
opment Corporation provides market facilities for the leather products manufactured
by small scale industries located in the state. The export market for leather products
is very high for good quality leather footwear's and leather crafts and articles. The
exports are mainly to European countries as Germany, Italy, UK, France etc.
Uttar Pradesh
U.P. is one of the most important states in India holding sizeable population of live
stock. Claiming a share of 22% U.P. ranks 1st in case of Buffalo and IInd in case of
Cattle having a share of 12%. With regards to Goat and Sheep it has IVth and VIIth
position respectively. Thus, U.P. has a very strong raw material base and all types of
main raw material for leather industry are available. Overview SINET 9 Major pro-
duction centers and Number of leather and leather products industries in U.P. are to
the tune of approx. 11500 of which Kanpur and Agra are the two famous production
centre in the world. Kanpur is a prominent centre for leather processing. About 200
tanneries are located in Kanpur. Kanpur tanneries specialize in processing hides into
heavy leather (Sole, harness and Industrial leather). This is the only centre in India
where saddlery products are manufactured. Agra has been the biggest centre for
shoe-manufacturing in the country. Apart from these traditional centers for leather
and leather products manufacturing in U.P., NOIDA has recently emerged as an-
other major centre especially for leather footwear and leather garments. NOIDA pro-
vides very good infrastructural facilities and establishment of FDDI in NOIDA is
expected to promote more footwear. Meerut is another centre for production of
sports goods.

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Leather
LICENSING POLICY
After de-reservation of 11 items in leather sector, which include semi-finished hides
and skins, leather shoes, leather washers and laces, moulded rubber soles and heels
for footwear, flexible polyurethane foam, polyurethane shoes soles, show-tacks &
eyelets and leather pickers and other leather accessories for textile industry, vide
Notification No SO 603(E) dated 29th June, 2001, no industrial license is required
for manufacture of most of the items of the leather industry.
However, the location of industrial projects will be subject to Central or State envi-
ronmental laws and regulations including local zoning and land use laws and regula-
tions. Industrial undertakings desiring to set up industrial undertakings for manufac-
ture of these items have to only file an Industrial Entrepreneurs' Memorandum
(IEM), in the prescribed format, with requisite fees to Secretariat for Industrial As-
sistance in the Department of Industrial Policy & Promotion, Government of India,
Udhyog Bhawan, and New Delhi-110011.
Some of the items of the Leather industry viz. leather shoe uppers (closed), leather
sandals and slippers, leather garments, industrial leather gloves, leather suitcase and
travel goods, leather purses and hand bag, fancy leather goods and novelty items,
watch straps and leather straps of all types are still reserved for exclusive manufac-
ture by the small scale sector. Small scale sector units are defined in terms of invest -
ment in plant and machinery. Non-small scale units can manufacture these items af-
ter obtaining industrial license, which is granted subject to an export obligation of 50
percent production in each year.
The leather industry is spread in different segments, namely, tanning and finishing, footwear
and footwear components, leather garments, leather goods including saddlery and harness,
etc. The estimated production capacity in different segments is as under:
Product
Capacity
· Leather hides
65 million pieces
· Skins
170 million pieces
· Footwear & Footwear Components
909 million pairs
· Leather shoe uppers
100 million pairs
· Non‐leather footwear
1056 million pairs
· Leather Garments
16 million pieces

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Leather
· Leather Goods
63 million pieces
· Industrial Gloves
52 million pairs
· Saddlery & Harness
12.50 million pieces
SWOT ANALYSIS
Strengths
• High Growth
• Ready availability of highly skilled and cheap manpower
• Large raw material base
• Policy initiatives taken by the Government
• Capability to assimilate new technologies and handle large projects
• Continuous emphasis on product development and design upgradation
Weaknesses
• Lack of warehousing support from the government

• International price fluctuation
• Huge labour force resulting in high labour charges
• Lack of strong presence in the global fashion market
• Unawareness of international standards by many player
• Major part of the industry is unorganized
Opportunities
• Rising potential in the domestic market (9% to 10% growth in 2018-19 )
• Growing fashion consciousness globally

• Use of information technology and decision support software to help elimi-
nate the length of the production cycle for different products
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Leather
• Use of e‐commerce in direct marketing
Threats
• Limited scope for mobilizing funds through private placements and public is-
sues (many businesses are family‐ owned)
• Difficulty in obtaining bank loans resulting in high cost of private borrowing
• Stricter international standards
• High competition from East European countries and other Asian countries
• Lack of communication facilities and skills
HUMAN RESOURCE REQUIREMENT IN THE LEATHER

INDUSTRY BETWEEN 2008 AND 2022
Leather Products Industry in Andhra Pradesh
The State is a major producer of hides and skins in India, contributing about 19 mil-
lion pieces per annum, which constitutes about 10 per cent of the country’s raw ma-
terial. Most of this raw material goes to States like Tamil Nadu and West Bengal for
processing. The major clusters are Hyderabad, Bhimavaram, Cuddapah, Eluru,
Karim Nagar etc. The State is having about 450 slaughter houses. There are about 34
large and medium tanneries in the State producing about 40 million square feet of
processed hides and skins per annum. Hyderabad and Nellore are the key leather
production clusters in Andhra Pradesh.
Leather Industry of Odisha
Odisha’s position in industrial growth is not very remarkable and leather and
footwear units have not developed substantially. There are no large and medium in-
dustries available in this sector. The major clusters are, Bhuveshawar, Behrampur,
Cuttuck, Jatni, etc. Footwear industries are concentrated in cottage and small scale
sector in this State. In the case of footwear component industry, there is no unit es-
tablished in the State.
Leather Industry of Punjab
Leather craft, especially the ‘Jootis’ or soft leather shoes, is a unique product from
Punjab. These light slip‐ons used to be embroidered in gold and silver thread, but are
now embellished with coloured threads. Punjabi Jootis are being produced all over

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Leather
Punjab by artisans. Punjabi Jootis are being produced all over the State by artisans.
The major clusters are Patilala, Bhatinda, Muktsar, Malot, Abohar, Fazilka,
Firozpur, Kotakpura, Gurdaspur & Amritsar. Products of each cluster have different
characteristics in terms of shape, pattern, design and colour. There are about 4,000
artisan families engaged in manufacturing of ethnic footwear. Jallandhar is the major
leather cluster in Punjab, with tanning as well as leather garment and goods manu-
facturing as the major production activities.
Leather Industry in Bihar
Bihar State has good quality and large quantity of cattle hides and goat skins and
sufficient human resource. Bihar accounts for third rank in the country next only to
West Bengal and Rajasthan. Hence, leather based industry is an important sector
which has a great potential in the State.
Bihar State is known for the best quality goat skins, cow hides and buff calf skins.
Patna, Muzaffarpur, Bettiah, Aurangabad, Munger, Purnia and Katihar are the main
regions of leather related activities in Bihar. The leather tanning industry in Bihar
consists of three important segments (i) units established under Bihar Leather Devel-
opment Corporation (BLDC) and its sister concern viz. Bihar Finished Leather ltd.
(ii) a few private tanneries working at Muzaffarpur and (iii) BATA tannery at
Mokhamaghat.
Leather Products Industry in Himachal Pradesh & Uttaranchal
The leather industry in Himachal is located in Baddi, an industrial area which is up-
coming mainly because of tax sops and single window clearance given by the State
government for investments. Roughly 33 footwear units have registered themselves
with the State’s Department of Industries to set up production units in this region.
Indian leather finishing chemical makers, C&E have constructed a new plant to pro-
duce PU binders for the leather industry within their leather chemical finishing fac-
tory at Baddi, Himachal Pradesh in March 2011. However a key issue facing the in-
dustry in this cluster is the lack of skilled manpower. An employment related rule in
the State stipulates that 70% of the employment in any production unit (regular/con-
tractual/sub‐contractual/daily) is reserved for the local population. As a result of this,
the industry has limited scope to hire trained migrant workers. Lack of skilled man-
power to work as Operators in a production unit is a major issue in this cluster. Re-
cently, the State of Himachal Pradesh has started developing as key cluster for the
growth of the footwear & leather products. ADIDAS is also developing its manufac-
turing facility at Solan district, known as the "Gateway of Himachal Pradesh”.
Leather Industry in Uttaranchal
Uttaranchal offers a wide range of benefits in terms of tax exemptions, interest in-
centives, financial assistance, subsidies and concessions as a result of which leading
companies of footwear manufacturing have established their units in the State such
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Leather
as Zara Footwear, Metro Shoes, Liberty Shoes Ltd., Prachi Leathers Pvt. Ltd, Neeraj
Shoe Industries etc. The State has transformed into a hub of industrial activity.
Leather Industry in Gujarat
The State of Gujarat is having shoe artisans in the Saurashtra region (also known as
Kathiawad region due to the presence of kathi people). No special product is being
made in the whole Saurashtra except the traditional farmer’s shoe called Bharwadi
Deshi Joda, which is made only in vegetable leather. The districts are producing
nothing special except local shoes like simple Derby, Oxford, Mozadi and casual de-
signs. Slippers & sandals are being made for ladies and gents. Out of the total shoes
made in the region, 75% are open shoes. Apart from that, a number of Leather Pro-
cessing Units are functioning there in the region, as co‐operative societies, supported
by (DIC) District Industry Centre. These Tanneries are mostly producing Vegetable
Tanned Leather.
Leather Industry in Maharashtra
The leather industry in Western India is primarily located in the State of Maharash-
tra. Leather clusters at Andheri (East) in Mumbai, Kolhapur and Bhiwandi are
mainly engaged in the production of leather shoe, sandals and leather goods. Maha-
rashtra accounts for 32% of the country’s production capacity of leather sandals and
15% of leather goods. Production in these clusters is highly seasonal with lean sea-
son in the period June to August, a result of the monsoons. Currently there are no
formal courses that train people for jobs in the footwear industry. Design is another
weak area in this cluster. Design in particular is a weak area in this cluster, whereas
it is extremely critical given the kind of shoes that are manufactured here, especially
for the exports market. A special focus on introducing a Design course is needed,
with emphasis on CAD. A few units that have invested in CAD software in this clus-
ter do not find people to use the same
Leather Industry in Karnataka
Bangalore is an important cluster for leather garments (contributing 15% of India’s

capacity), with some small units engaged in production of shoe uppers. In 2008‐09,
the cluster exported Rs 269.1 crore worth of leather and leather products. Leather
garments accounted for the largest share (51%), followed by leather footwear. In-
dustry’s major concerns here are shortage of skilled manpower (mainly in leather
cutting) and raw material availability.
Leather Industry in Goa
Madagao, Mapusa, Panaji, Zuari and Ponda are the important places for slaughter of
animals in Goa. Madagao, a commercial city, which is 15 kms away from the capital
city of Panaji is the only place for raw hides and skins business. The Mandi is near
Gandhi market. All the raw hides and skins move from Goa to Tamil Nadu by road.

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Leather
ROLE OF FOREIGN INVESTMENT

The role of FDI in growth in countries such as China and Vietnam merits examina-
tion for developing a strategy to attract FDI in India.
Growth of the Chinese Leather Industry was driven by Korean investors and Tai-
wanese Investors and starting with the opening of the Chinese Economy in early
1980s. These investors created large facilities, across South and South East China
(and subsequently Southern Vietnam), and helped create an export driven industry.
Over time, these industry clusters also saw the emergence of home‐grown en-
trepreneurs, many of whom had benefitted from the infusion of technical know‐how
from Taiwan and Korea, as well as development of ancillary component industries.
Subsequently, industry from Europe also invested in China‐based manufacturing.
Foreign Capital has likewise played a key role in Vietnamese Industry (which com-
prises largely of footwear, alongside some leather products such as bags). The coun-
try’s Footwear manufacturing sector, started to modernize in 1990s with foreign in-
vestment from Taiwanese and Korean sports footwear vendors who set up units in
Vietnam, spotting the opportunity offered by the Generalized System of Preferences
(GSP) regime. Sports footwear (non‐leather and leather), remains the largest product
segment even today in Vietnam. These Korean and Taiwanese sportswear vendors
have over time, also set up factories in Indonesia, Thailand and Cambodia. The aver-
age headcount at such foreign‐owned enterprises (e.g. Pou Chen, Poyuen (Taiwan),
Shang Hung Cheng, Tea Kuang VN and Hwa Soung (South Korea)) runs into tens
of thousands. These firms contribute about 40% of Vietnam’s footwear exports.
The Bangladesh government declared the Leather and Footwear Sector as a thrust
sector in 2005‐2006. In parallel, as Vietnam came under an anti‐dumping duty inves-
tigation, Bangladesh came to be seen as an attractive destination for setting up
footwear manufacturing units, given its LDC status which ensured preferential mar-
ket access in many developed economy markets. This was especially true for two
categories of products – OEM sports shoes and mass‐ merchandiser’s casual shoes,
both of which are high volume, low margin businesses from a manufacturing per-
spective. These have had a multiplier effect on Bangladesh’s Industry, which is still
continuing.
CURRENT FDI REGULATIONS AND INDIA’S POSITIONING

The entire leather sector is de‐licensed paving the way for expansion of capacities
on modern lines with state‐of‐the‐art machinery. To further assist this process, the

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Leather
Government has permitted 100% Foreign Direct Investment through the automatic
route for the Leather Sector. Automatic route means that no prior permission is re-
quired either from the Government of India or from Reserve Bank of India for the
investment. The investors are only required to notify the regional office concerned
of RBI within 30 days of receipt of inward remittances and file the required docu-
ments with that office within 30 days of issue of shares to foreign investors.
LEATHER GOODS MARKET - GROWTH, TRENDS, AND

FORECASTS (2020 - 2025)
Market Overview
The leather goods market is forecasted to record a CAGR of 6.2% during the forecast
period (2020-2025).
· Leather goods are highly popular among consumers as they have inherent
qualities, such as dustproof, fireproof, crack-proof, and durability, which
are expected to increase the growth of the leather goods market.
· Moreover, the growing demand for trendy handbags, premium leather wal-
lets, and other leather products is influencing the growth of the leather
goods market from the last few years.
· Growing government support for the leather industry is further driving the
market growth. For instance, in India, 100% Foreign Direct Investment is
permitted through the automatic route and the government has reduced the
excise duty to 6% from 12% on leather footwear (footwear with uppers
made of leather) with a retail sale price of more than USD 14.55 per pair.
Key Market Trends
Increased Demand for Leather Accessories
The thriving fashion industry has majorly uplifted the demand for leather handbags
and wallets among the consumers, thereby driving the accessories market in the re-
gion. As a result, leather handbags hold the major market share in the accessories
segment. In addition, leather accessories are not just limited to a general need. The
consumers are more inclined toward aesthetic factors, and demand premium range
goods as a fashion statement. Europe-based companies, such as Gucci, Gianni Ver-
sace, and Louis Vuitton, are the key players involved in the manufacturing of leather-
based luxury goods.

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Leather
LEATHER GOODS MARKET,Y-O-YGROWTH
RATE,EUROPE,2017-2019
5.75
4.6 4.46
3.36
3.45 3.16
2.3
1.15
0
2017 2018 2019
Figure 11
Europe Emerges as the Largest Consumer of Leather Goods
Increasing fashion consciousness, rising disposable incomes, and increasing demand

for attractive bags are driving the sales of luggage and leather goods in the region.
The growing interest of consumers in travel and unique experiences is boosting the
demand for leather goods, such as luggage bags, especially in the luxury segment as
consumers increasingly sought high-quality items. Moreover, with the strong preva-
lence of fashion-driven countries, such as France and Italy, the region remains the
largest consumer of the market.
Figure 12
CONCERNS AND CHALLENGES

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Leather
❖ Although India has gradually liberalized its cumbersome compliance and documen-
tation policies for global trade, it still lags behind most of the developed countries
and even similarly placed developing countries.
❖ India’s cost of logistics, as a share of the GDP, is one of the highest in the world
(12–13 percent of the GDP) compared to the developed markets (below 10 percent
of the GDP). This is reflected in the transportation cost per kilometer, which may
hamper the industry’s competitiveness as the industry is export-based and has to
reach a wide retail market.
❖ The slow pace of reforms in the Indian power sector has had a specific detrimental
effect on the leather industry in the form of additional cost of power back-up.
Leather industry expects government to allow full operations in June, fears los-
ing orders:
The leather industry has seen order cancellations of $1 billion due to

the COVID-19 lockdown
The leather industry expects the government to allow full-fledged
operations in June, otherwise it fears it will lose export orders to other
countries.
“However, April, May and June are the peak demand season and it is
important to resume 100% production”.
The leather industry has seen order cancellations of $1 billion due to the
lockdown, out of which Tamil Nadu accounts for 37%. With other
countries like Vietnam opening up, it is important to ensure that industry
does not lose out to other countries in terms of export orders. The Indian
leather sector accounts for over $5 billion in exports and is the second-
largest producer of footwear and leather garments in the world, the second-
largest exporter of leather garments and the third-largest exporter of
saddlery and harnesses.
BUDGET 2020
Leather industry is hoping for measures to boost exports in today's Budget. Leather
industry in India is facing stiff competition from Bangladesh and Vietnam.

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Leather
The Council for Leather Exports (CLE) expects the government to announce support
measures to push leather exports. "With a huge and growing global market, we see
very good opportunities for growth this year. We expect additional support measures
for the sector in the upcoming Budget for 2020-21 and also in the foreign trade pol-
icy which will further catalyze our growth.
The leather industry holds a prominent place in the Indian economy but the export of
leather goods has declined 7.55 per cent to $3.6 billion during April-December pe-
riod this fiscal. The sector, which is among the top ten foreign exchange earners for
the country, has also sought duty exemption on imports of raw materials for non-
leather footwear, which it believes has a huge potential for growth.
As per the Directorate General of Commercial Intelligence and Statistics (DGCI
&S), the leather footwear constitutes about 39 per cent in value terms in global im-
port of footwear and 14 per cent in volume terms in global export. It employs about
4.4 crore people, mostly from the weaker sections of the society.
The export of footwear, leather and leather products from India reached a value of
$5.69 billion during 2018-19, registering 8 per cent Y-o-Y growth. The country's ex-
ports contracted for the fifth month in a row by 1.8 per cent in December 2019 to
$27.36 billion.
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.
COMPETITIVE LANDSCAPE
The leather goods market is highly fragmented as in the organized sector few key
players are holding a major market share whereas, in the unorganized sector, many
small players are competing to gain market share. Adidas, Samsonite, and Kering are
some prominent players in the global market.

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Leather
BIBLOGRAPHY
www.dgciskol.gov.in
www.trademap.org
www.indiatradeportal.in
www.leatherindia.org
www.makeinindia.com
www.dipp.gov.in
www.fddiindia.com
www.nift.ac.in
www.cftichennai.in
www.clri.org
www.indiabudget.gov.in
www.ibef.org
www.investindia.gov.in
www.pib.gov.in
www.thehindu.com
www.economictimes.com
www.researchgate.net
www.cec-india.org
www.exinbankindia.in

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A Project Report On Leather

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A Project Report On Leather

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A PROJECT REPORT ON

INTERNATIONAL MARKET RESEARCH ON LEATHER

Indian Leather Industry; Trend &Potential

Or International Market Feasibility for Indian Leather Industry

SUBMITTED IN PARTIAL FULFILLMENT FOR

“MASTERS OF INTERNATIONAL BUSINESS PROGRAMME”

OF NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES

SUBMITTED BY: TARUNA PRADHAN

fulfillment of 2 year, full time Master of International Business.

Name & sign of faculty

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

made this project successful.

My deepest sense of gratitude, profound respect and sincere thanks to my mentor

(faculty member NARSEE MONJEE INSTITUTE OF MANAGEMENT

reach this stage without his support & guidance.

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

I TARUNA PRADHAN, student of MBA of NARSEE MONJEE INSTITUTE

OF MANAGEMENT STUDIES, hereby declare that the project report on

“INTERNATRIONAL MARKET RESEARCH ON LEATHER”

LEATHER EXPORTS is an original and authenticated work done by me. The

Name of the student – TARUNA PRADHAN

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

greater need to access legacy materials created with outdated technology It is my

bility for future generations.

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

8. TOP FIVE INDIAN STATES EXPORTING LEATHER

9. LEATHER MAKING PROCESS……………………....25-30

11.INDIA’S LEATHER EXPORTS………………………..34-37

12.HIGHLIGHT OF PRODUCT SEGMENT OF INDIAN

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

14.PROMOTION OF LEATHER INDUSTRIES BY GOVERN-

10.2 GOODS AND SERVICE TAS (GST)

10.3 DUTY FREE IMPORTS OF INPUTS

10.4 INTEREST EQUILIZATION RATE

10.5 REMOVAL OF ANIMAL QUARANTINE CLEARANCE

10.6 REDUCTION OF BASIC CUSTOMS DUTY

15.SPECIAL CENTRAL GOVERNMENT PACKAGE FOR

16.REFORMS UNDER FTP (2015-2020)………………………43

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

19.COMMMODITIES EXPORTS FROM INDIA WITH HS

20.REGISTRATION CUM MEMBERSHIP CERTIFICATE

21.DOCUMENTS REQUIRED,FEES AND CHARGES TO BE-

23.SCOPE TANNERIES IN INDIA………………………….74-75

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

26.HUMAN RESOURCE REQUIREMENT IN THE LEATHER

27.ROLE OF FOREIGN INVESTMENT………………………81

28.CURRENT FDI REGULATIONS AND INDIA’S POSI-

29.LEATHER GOODS MARKET- GROWTH,TRENDS AND

30.CONCERNS AND CHALLENGES………………………….84

32.OBJECTIVE OF THE STUDY……………………………...85

33.SCOPES OF THE STUDY…………………………………..85

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

LIST OF TABLES AND FIGURES

TABLE 1 – LEATHER EXPORTS DURING APRIL-JUNE 2018…………..34

TABLE 2 – INDIA’S EXPORTS OF LEATHER AND PRODUCTS FOR 5

NARSEE MONJEE INSTITUTE OF MANAGEMENT STUDIES, MBA

TABLE 4 – MEMBER CATEGORY BASED ON EXPORT FOB VALUE….73

FIGURE 1- LEATHER PRODUCTION CENTRE…………………………….19

FIGURE 2- EXPORTS OF LEATHER AND PRODUCTS IN 2020…………35

FIGURE 2 - % SHARE OF LEATHER AND LEATHER PRODUCTS FY

FIGURE 4 – LEATHER JACKET…………………………………………44-46

3.1 TOP EXPORTING MARKET FOR THE PRODUCT EXPORTED BY INDIA

3.2 TOP IMPORTING COUNTRIES IN THE WORLD