There was a time till some twenty years ago when leather export business was done on sound footings with regular and traditional buyers in UK, USA, Japan etc who respected the contractual terms entered into by Indian and UK leather associations. They concluded business mostly for payment. At sight by irrevocable and confirmed L/c. With the expansion of business things are totally different now and contract terms differ from person to person and business is done even for payment at 120 days or more after shipment with or without L/c.

Business goes on well as long as it is profitable to buyers. The moment unfavourable market is witnessed, they either deliberately or by complulsion want to take advantage of it by making the shippers to either reduce the price or allow more time for payment. And it is not possible to take back the goods shipped.

In such cases the exporters are forced to compromise with them. Sometimes some customers do not make payments at all on some pretext of other and in such cases the exporters are totally helpless as recovery is a Himalayan task if not impossible. The export credit claims lodged with the Export Credit Guarantee Corporation of India (ECGC) by the leather and leather products industry are estimated to be more than Rs 300 crore although the exact figures are not available. The total claims the ECGC faces, according to its chairman and managing director BB Sharma is Rs 1000 crore.

An exporter of leather garments who has lodged a claim for more than one crore of rupees with the ECGC feels that the present "unsound business terms" in accordance with the current market dictates have no guarantee for payment and the ECGC guarantee that it will compensate the loss for those who have taken the policy and follow it, although gives exporters a confidence to do more and more business, is also instrumental for their sufferings. Another exporter points out that getting the claim amount from the ECGC is very difficult and time-consuming. Many claims remain unsettled for years together. Many export companies remain closed because of payment problems.

Many exporters want the ECGC to guide the exporters by publishing the list of unreliable customers and giving them quick information about the financial standing of buyers abroad. Market: Both domestic and overseas markets are good with purchases made by different sources. Goat glazed upper, lining and shoe suede leathers in ADC/TR/ADC grades are sold at around $1.80/ $0.80/ $1.40 per sq feet. Sheep; nappa and cabretta are also well sought after items at around $1.60 and $1.80 per sq ft. Domestic shoe and garment manufacturers continue their purchases at almost unchanged prices depending on the quality and selection. The days of over stocks are gone in EI tanned skins. Almost every tanner reports well-sold or over-sold position. Big products makers continue to import their requirements of raw hides and skins. They expect the leather market to be better in the near future soon after the annual holidays in Europe and America are over in the middle of September.