Leather exports to traditional markets decline 10% in FY13

Leather exports from the country to traditional markets like Germany, Italy, Spain and Russia recorded a 10% decline during the last fiscal and the industry is now looking at other markets to boost exports.

The leather industry is planning to revisit strategies with countries where a free trade agreement (FTA) or comprehensive economic partnership agreement (CEPA) has been signed.

Addressing members of the All India Skin and Hide Tanners and Merchant?s Association, M Rafeeque Ahmed, its president, said: “It is indeed disheartening that exports to our traditional markets like Germany, Italy, Spain and Russia have recorded a more than 10% decline. However, US and Denmark have recorded an increase of 20%, with UK coming next with 10%. We have to look at East, African and South American countries for a huge push in our exports as these countries have great potential.?

On the need for having new export strategies, he said the idea of FTA was to boost exports by taking advantage of tariff concession. Exports to countries with which the country had trade pacts have actually declined.

?Such countries in the region should be put under the Focus Market Scheme to dovetail exports while conscious attempts should be made by exporters to avail of the tax concession benefits and step up exports substantially,? Ahmed said.

Raw material shortage is a nagging problem facing the industry as large quantities of semi-finished leather are being exported to China and Italy.

The recent decision of the Centre accepting the views of the Council for Leather Exports (CLE) ? making certification by the Central Leather Research Institute (CLRI) mandatory for exports ? will prevent clandestine exports and result in increased availability of raw hides and skins for local tanneries.

?Our domestic market is very encouraging and I am indeed glad that many of the entrepreneurs are paying more attention to it,? he said.

During 2012-13 the leather industry touched $5 billion in exports revenue from $4.8 billion recorded in the previous fiscal.

Though leather exports in 2012-13 rose by around 3% to touch around $5 billion, it was originally expected to touch $5.4 billion.

The leather industry is among the top 10 foreign exchange earners and the country?s oldest tanning cluster is in Vellore district along with similar clusters such as Erode, Dindigul, Tiruchirappali and Chennai. The Centre has also proposed to set up seven mega leather clusters across the country.