Opportunities

As per the officially notified data, export of leather and leather products for the period April-March 2008-09 touched US$ 3598.64 million against the performance of US$ 3548.51 million in the corresponding period of last year, registering a positive growth of 1.41% in Dollar Terms. In rupee terms the export touched Rs.165513.28 million against the previous years performance of Rs.142865.69 million showing a positive growth of 15.85%.

It is heartening to note that despite the global economic melt-down and its implications on exporters, leather sector has indeed registered a positive growth both in Rupee and Dollar terms in the financial year 2008-09 while several other sectors showing a declining trend.

In Rupee terms, export of leather footwear increased by 21.03%, footwear components by 4.50%, Leather Garments by 40.97%, Leather Goods by 24.63% and Non-Leather Footwear by 8.07%. Export of saddlery & harness alone marginally declined by 0.85%.

In Dollar terms, leather footwear increased by 5.94%, leather garments by 23.40% and Leather Goods by 9.10%. Export of finished leather declined by 16.58%, footwear components by 8.52%, saddler & harness by 13.21% and non-leather footwear by 5.40%.

Export of Footwear (leather, footwear components & non-leather footwear) has increased from US$ 1489.35 million in April-March 2007.08 to US$ 1533.66 million in April-March 2008-09, registering a growth of 2.98% and accounting a major share of 42.62% in India’s total leather products export of US$ 3.59 billion.

India with its advantage in the availability of raw material and large number of people available in the employment sector with its low manufacturing cost provides ample opportunities for entrepreneurs to invest and grow. Government of India policy of allowing 100% FDI has opened the gate for global leather entrepreneurs to explore this leather rich country.

Special Economic Zones (SEZs) are created in India for producing leather products. These zones are deemed foreign territories where exports and imports are duty free. A foreign investor can own his factory in these zones and could repatriate 100% profit. There are huge concessions in taxes with five year holiday on the profit tax (income tax) and another five year with lesser percentage of tax as compared to units outside the SEZ. Plots are available in SEZ for investments. For details please contact CLE at cle@cleindia.com

Joint ventures and business collaborations are the known business models in Indian leather sector. As the consumption in the domestic market is increasing day by day, India is poised to import large quantities of leather from abroad. It would be beneficial for the overseas brand owners to forge business partnerships with the existing manufacturers in India with or without equity participation and manufacture goods for domestic market. Large number of living examples of JVs are there for anyone to see.

Government of India is facilitating the development of infrastructure by promoting leather product parks. These parks are expected to have a complete link in the supply chain and they are expected to increase the production of leather goods and products in the next five years. For details contact cle@cleindia.com