PROSPECTS AND CHALLENGES FACED BY LEATHER PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC REFERENCE TO YORK SHOES PVT LTD AS AN ILLUSTRATIVE CASE

A Project Report Submitted to Bangalore University in Partial Fulfilment of the academic requirements for award of

MASTER OF INTERNATIONAL BUSINESS

BY

MADHAN KUMAR D R

Reg.No - 124BMIB003

Under the Guidance of

PROF.SUNIL RAO

International Academy of Management & Entrepreneurship

Bangalore

Academic Year 2013- 2014

PROSPECTS AND CHALLENGES FACED BY LEATHER PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC REFERENCE TO YORK SHOES PVT LTD AS AN ILLUSTRATIVE CASE

A Project Report Submitted to Bangalore University in Partial Fulfilment of the academic requirements for award of

MASTER OF INTERNATIONAL BUSINESS

BY

MADHAN KUMAR D R

Reg.No - 124BMIB003

Under the Guidance of

PROF.SUNIL RAO

International Academy of Management & Entrepreneurship

Bangalore

Academic Year 2013- 2014

CERTIFICATE

This is certify that Mr Madhan Kumar D R pursuing MIB under Bangalore University

(124BMIB003) has completed a Project during IV Semester and has made a report titled

“PROSPECTS AND CHALLENGES FACED BY LEATHER PRODUCT EXPORTERS

OF AMBUR WITH SPECIFIC REFERENCE TO YORK SHOES PVT LTD AS AN

ILLUSTRATIVE CASE” in Partial Fulfilment of the requirements for award of the degree

of MASTER OF INTERNATIONAL BUSINESS.

This is to further certify that this report is an original work of Mr Madhan Kumar D R.

and that this report has not been submitted for any other degree / diploma offered by

Bangalore University .

Guide Executive Director

Date:

DECLARATION

This report titled “PROSPECTS AND CHALLENGES FACED BY LEATHER

PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC REFERENCE TO YORK

SHOES PVT LTD AS AN ILLUSTRATIVE CASE” is being submitted in Partial

Fulfilment of the requirements for award of the degree of MASTER OF

INTERNATIONAL BUSINESS by Bangalore University, as mandatory for the IV

Semester studies.

I hereby declare that the Project is my original work and that this report has not

been submitted and / or is not planned to be submitted for any other degree /

diploma offered by Bangalore University.

MADHAN KUMAR D R

Reg. No: 124BMIB003

Place :

Date :

ACKNOWLEDGEMENT

The purpose, initiative and best result of this project would be incomplete

without the guidance and encouragement of the below mentioned people. I believe that

this project is going through the level ahead of my understanding and the success would

have never been possible without my guiding people. I script on this page my sincerest

thanks to each one of them.

I take great privilege and great pleasure to express my sincere and heart full thanks to

Dr. B K Murty, Dean of International Academy of Management & Entrepreneurship,

Bangalore, for providing me the facilities in the institution to complete my project

successfully. I sincerely thank Mr. Bilu M V, Executive Director of International

Academy of Management & Entrepreneurship, Bangalore. My heart full thanks to

Prof. Sunil Rao, Principal of the institution for his full support throughout the project

duration.

I express my heart full thanks to Mr. N.Balasubramaniam, Managing director

of YORK SHOES PVT LTD, AMBUR for all his support and help to do my project

effectively and also to all members of the company for their warm attitude throughout my

project period.

MADHAN KUMAR D R

TABLE OF CONTENTS

CHAPTER NO

PARTICULARS PAGE NO.

1 INTRODUCTION 1-3

2 COMPANY PROFILE 4-8

2.1 DEVELOPMENT & TESTING 6

2.2 CRAFTMANSHIP 7

3 RESEARCH DESIGN 9-11

3.1 AIM 9

3.2 OBJECTIVES 9

3.3 PURPOSE OF THE STUDY 9

3.4 RESEARCH QUESTIONS 10

3.5 RESEARCH DESIGN 10

3.6 SAMPLING PLAN 10

3.7 METHODOLOGY 11

3.8 TOOLS FOR DATA COLLECTION 11

3.9 LIMITATIONS 11

4 LITERATURE SURVEY 12-34

4.1 ISSUES 13-15

4.1.1 THE INDUSTRY’S GLOBAL PERSPECTIVE

13

4.1.2 HIDES AND SKIN PRODUCTION AND TRADE

14

4.1.3 ENVIRONMENTAL IMPACT OF LEATHER INDUSTRY

14

4.1.4 MARKET EXTERNALITIES 15

4.2 CHALLENGES 15-17

4.2.1 TECHNICAL BARRIERS 15

4.2.2 SMALL AND MEDIUM ENTERPRISES

15

4.2.3 ECONOMIC BARRIERS 15-16

4.2.4 INADEQUATE LEGISLATION AND LACK OF MONITORING FACILITIES

16

4.2.5 SOCIAL BARRIERS 16

4.2.6 TECHNICAL ASSISTANCE 16-17

LABORATORIES4.3 LEATHER MANUFACTURING PROCESS: 17-21

4.3.1 CURING: 17

4.3.2 SOAKING: 17

4.3.3 DE-HAIRING: 17

4.3.4 FLESHING: 18

4.3.5 DE-LIMING 18

4.3.6 PICKLING 18

4.3.7 LEATHER TANNING 18

4.3.8 WRINGING 20

4.3.9 SPLITTING 20

4.3.10 SHAVING 20

4.3.11 RE-LEATHER TANNING 20

4.3.12 COLORING 20

4.3.13 FATLIQUORING 20

4.3.14 SETTING OUT 20

4.3.15 TOGGLING 20

4.3.16 STAKING 20

4.3.17 DRY MILLING 21

4.3.18 BUFFING 21

4.3.19 FINISHING 21

4.3.20 PLATING 21

4.4 GOVERNMENT REGULATION AND SUPPORT

21-23

4.5 METHODOLOGY 24

4.6 COVERAGE 24-26

4.6.1 LEATHER INDUSTRIES 24

4.6.2 WORKERS 25

4.6.3 PAN WALA 25

4.6.4 VILLAGERS 25-26

4.6.5 WASTEWATER TREATMENT PLANT 26

4.7 ANALYSIS OF PRIMARY AND

SECONDARY INFORMATION

27-29

4.7.1 GOVERNMENT 27

4.7.2 CETP 28

4.7.3 INDUSTRIALIST 28

4.7.4 COMMON MAN (FARMERS) 29

4.7.4.1 ECONOMICAL 29

4.7.4.2 HEALTH 29

4.8 SUGGESTIONS AND CONCLUSIONS 29-33

4.8.1 GOVERNMENT REGULATIONS 30

4.8.2 EFFECTIVE MONITORING30

4.8.3 INTER LEATHER INDUSTRY MONITORING

31

4.8.4 ECO LABELLING 31

4.8.5 FINANCIAL SUPPORT 31

4.8.6 QUALITATIVE BOOST 32

4.8.7 HUMAN RESOURCE DEVELOPMENT 32

4.8.8 DEVELOPMENT OF COMMERCIAL PLANTS

32-33

4.8.9 OTHERS 33

4.9 SWOT ANALYSIS 34

5 ANALYSIS, INTERPRETATION AND FINDINGS

35-87

5.1 DATA ANALYSIS OF THE COMPANY 36-41

5.1.1 KEY DRIVERS 42

5.1.2 CORE VALUES 42

5.1.3 LEATHER DEVELOPMENT 42

5.1.4 INFORMATION TECHNOLOGY 42

5.1.5 COMPANY STRUCTURE 43

5.2 LEATHER INDUSTRY ANALYSIS IN 43-87

DETAILS 5.2.1 FINISHED LEATHER 43-52

5.2.2 FOOTWEAR INDUSTRY 52-62

5.2.3 LEATHER GARMENTS 62-69

5.2.4 LEATHER GOODS, ACCESSORIES & GLOVES

70-81

5.2.5 SADDLERY & HARNESS 81-87

6 CONSLUSION & RECOMMENDATION

88

BIBILIOGRAPHY

ANNEXURE

S.No LIST OF TABLES Page numberTable 1 India’s Leather industry export data 35

Table 2 Finished leather import and export 44

Table 3 Major importing countries of finished leather 45

Table 4 Exporting countries of finished leather 46

Table 5 Live stock production 48Table 6 India’s export of finished leather 48

Table 7 India’s export markets for finished leather 49

Table 8 Quality wise export of finished leather 50

Table 9 Region wise export of finished leather 51

Table 10 Major importing countries of Footwear 56

Table 11 Major exporting countries of footwear 56

Table 12 Global import and india’s export of footwear 58

Table 13 India’s export of footwear 60Table 14 Global scenario of Leather garments 62

Table 15 Major importing countries of leather garments 63

Table 16 Major exporting countries of leather garments 64

Table 17 India’s export on leather garments 66

Table 18 India’s Major export market of leather garments 67

Table 19 Region wise export of leather garments 68

Table 20 Quality wise export of leather garments 69

Table 21 Region wise export of leather garments in pieces 70

Table 22 Global scenario on leather goods, accessories and gloves 71

Table 23 Major importing countries of Leather goods & accs 72

Table 24 Top exporting countries of leather goods and accs 73

Table 25 Global scenario on leather gloves 74

Table 26 Major importing countries of leather gloves 75

Table 27 Major exporting countries of leather gloves 75

Table 28 India’s export of leather goods, accs & gloves 77

Table 29 India’s export of leather gloves 77

Table 30 Country wise india’s leather goods & accs export 78

Table 31 Quality wise export of leather goods 79

Table 32 Quality wise export of leather gloves in pieces 80

Table 33 Region wise export of leathergoods 81Table 34 Region wise export of leather gloves 81

Table 35 Global scenario on saddlery & harness 82

Table 36 Major exporting countries of saddlery & harness 83

Table 37 Top exporting countries of saddler & harness 84

Table 38 India’s export of saddler & harness 85

Table 39 Major market for india’s saddlery & harness 87

Table 40 Quality wise export of harness & saddlery 88

Table 41 Region wise export of harness and saddlery 89

S.No LIST OF FIGURES Page number

Figure 1 General flow diagram for leather tanning and finishing process 19

Figure 2 General leather industry business structure 36

Figure 3 Pollution control norms 36Figure 4 Friendly environment 37

Figure 5 Major role in growth of indian economy 37

Figure 6 Major source of work 38Figure 7 Income for cost of living 38Figure 8 Demand for product 39Figure 9 Major source of income 39Figure 10 Employment retension rate 40Figure 11 Government subsidies 40Figure 12 Support of local people 41Figure 13 Problem of contaminated water 41Figure 14 Structure of leather industry 43

Figure 15 Work import vs India’s export of finished leather 44

Figure 16 Finished leather exporting countries 46Figure 17 Finished leather exporting countries 47Figure 18 India’s finished leather export 50

Figure 19 Quality wise export of finished leather 51

Figure 20 Region wise export of finished leather 52

Figure 21 Major importing countries of Footwear 57

Figure 22 Major exporting countries of footwear 58Figure 23 India’s footwear export growth 59Figure 24 India’s Footwear export 61

Figure 25 World import and india’s export on leather garments 63

Figure 26 Major Leather garments importing countries 64

Figure 27 Major exporting countries of leather garments 65

Figure 28 India’s export of leather garments 66

Figure 29 India’s Major export market of leather garments 68

Figure 30 Quality wise export of leather garments 70

Figure 31 Global scenario on leather goods, gloves & accessories 71

Figure 32 Major importing countries of leather goods and accs 72

Figure 33 Top exporting countries of leather goods & accs 74

Figure 34 India’s export of leather gloves 78

Figure 35 Country wise india’s leather goods & accs export 78

Figure 36 Quality wise export of leather goods 80

Figure 37 Global scenario on saddlery & harness 83

Figure 38 India’s saddlery & harness export 86

Figure 39 Major market for india’s saddlery & harness 88

Figure 40 Quality wise export of harness & saddlery 89

Figure 41 Positive trend in exports: share of leather and leather products 89

CHAPTER-1

INTRODUCTIONLeather entrepreneurs are one of the largest foreign exchange earners of our

country, who unfailingly give a boost to the national economy and per capita income.

Leather industry provides more employment opportunities to the backward communities.

Even so, the industry is facing innumerable problems in the functional areas due to the

banning of slaughtering of animals in the name of sacrifice, and safeguarding the poor

that has resulted in the closure of many units in Tamil Nadu especially in Erode District.

The goat skins available in Erode are considered to be of the best quality in the world.

There are 62 tannery units in Erode, out of which only 42 units are functional, and the rest

are closed by the pollution board due to some environmental problems. Besides, leather

entrepreneurs are facing a lot of problems in the areas of production, processing,

marketing, finance and personnel. This study attempted to identify the common problems

faced by the leather entrepreneurs. For this purpose, data were collected through

questionnaires and analyzed using Henry Garret Technique. This study identifies the most

important problems in each functional area such as inadequate funds to construct water

effluent treatment plants, delay in payment by the buyers, slow process in sanctioning

funds by bankers, unauthorized labour absenteeism, poor quality of equipments and

government restrictions.

Though the industry has expanded rapidly in different parts of the country, most of the

units are in a state of decline. In any organization efficient management is inevitable. If

there is a slight disorder, the whole system collapses gradually. It becomes difficult to

rebuild it. The leather entrepreneurs are facing a number of problems both internally and

externally. The new policies framed by the Government of India directly affect the

functional areas of leather industry. In the name of holiness, some powers are trying to

implement ban on slaughtering of animals totally and stringent pollution norms are being

adopted by the State and Central Governments, which are directly affecting the growth

and progress of leather industry. This reflects in the closure of some units and creating

unemployment problems especially for semiliterate, illiterate and downtrodden

communities.

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Leather exports from India could touch $8.25 billion by 2013-14, more than double the $

3.40 billion it exported in 2009-10. India's leather exports are likely to grow 20 per cent at

$6 billion by the end of the current fiscal, and may even touch $14-billion mark by the

end of the 12th Five Year Plan, the Council for Leather Exports said. Leather exports are

expected to rise by 20 per cent to $6 billion by end of the current fiscal, and the industry

has a target to achieve $14 billion by 2016-17

The leather industry employs about 2.5 million people and has annual turn over of

Rs.25,000 crores. The industry is also one with strong links with the social structure

throughcaste and community.

The leather and leather products industry is one of India’s oldest manufacturing industries

that catered to the international market right from the middle of the nineteenth century,

the demand for its products being both domestic as well as international right from the

beginning. About 46 per cent of the production in the sector is exported and it ranks

eighth in the list of India’s top export earning industries and contributes roughly Rs.

10,000 crores per annum, i.e., about 4 per cent to export earnings.

The sector accounts for 2.5 per cent of the global leather-related trade of Rs. 387,200

crores. An estimated 15 per cent of total purchase of leading global brands in footwear,

garments, leather goods & accessories, in Europe, and 10 percent of global supply is

outsourced from India.

To be more specific, the major production centers of leather and leather products are

located at Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul in Tamil Nadu,

Kolkata in West Bengal, Ambur and Agra in U.P., Jallandhar in Punjab, Delhi,

Hyderabad in Andhra Pradesh, Bangalore in Karnataka and Mumbai in Maharashtra.

Tamil Nadu is the biggest leather exporter (40%) of the country and its share in India’s

output on leather products is 70%.

Leather industry in Tamil Nadu is considered to be very ancient and some say it is of

more than two centuries old. The art of tanning of hides and skins is prevalent here since

time immemorial. Once it was done in primitive tanning methods and passed on with

some improvements from generation to generation. 

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Ambur houses hundreds of leather tanning and manufacturing facilities. It is a leading

cluster for export of finished leather, shoe uppers, full shoes and is a major contributor to

India's leather and leather-related products. Factories here manufacture shoes for world's

leading footwear brand names like Effegi, Florsheim Shoe, Lumberjack, Cole Haan,

Gabor, Primigi, Caterpillar, Clarks, Sioux, Fretzmen, Hi-Line, Hugo Boss, Marc,

NunnBush NXT and many more. Some of the prominent names that have set up

manufacturing units here are Farida Group, Safura Group,SSC Group, Bonaventure

Shoes, NMZ Group of Industries, TAW Group, KAR Group, NMH & Co., Florence,

Irbaz Shoes, Mohib Shoes, ESAAR Group, Harmain Leather Exports, etc., and now FDIs

(Foreign Direct Investments) have become very common, to name a few establishments

ITARES (Italy Renzi Shoes) of Italy, Allen Solly of Switzerland etc. These companies

provide a major chunk of employment to the local population which is skilled. Traders

who supply shoe materials, chemicals to these companies have huge business

opportunities over here.

Ambur has been recognized as 'Town of Export Excellence' for leather products

by Government of India. "Ambur Trade Centre" has been constructed with financial

contribution from Indian government and the leather industry which provides a platform

for holding international exhibitions, conferences, workshops, and Leather Testing

Services TUV has their Sample Collection office at this premises.

One of the problems that Ambur faces is polluted ground water which is not potable due

to the chemicals released by the leather tanneries directly into the most-of-the-time-

dry Palar River traversing across Ambur before the Common Effluent Treatment

Plants that use Reverse Osmosis process were installed. However, with strict measures

taken by the State Government in the interest of public and to preserve the water table

pollution-free, most of the companies have now installed effluent treatment plants to treat

the water from harsh chemicals such as hexavalent chromium, trivalent chromium, etc.

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CHAPTER-2

COMPANY PROFILE - YORK SHOES PVT LTD:

York Shoes Private Limited is a Private Company incorporated on 12 December 2007. It

is classified as Indian Non-Government Company and is registered at Registrar of

Companies, Chennai. Its authorized share capital is Rs. 73,000,000 and its paid up capital

is Rs. 72,573,104. 

York Shoes Private Limited's Annual General Meeting (AGM) was last held on 30

September 2013 and as per records from Ministry of Corporate Affairs (MCA), its

balance sheet was last filed on 31 March 2013. 

India's first proposal for 100 percent FDI in single-brand retail got FIPB nod. The

proposal is by luxury shoe-maker Pavers England. York shoes manufactures Shoes for

Pavers England and they export it to UK.

With Mauritius-based Pavers Foresight Smart Ventures investing in a footwear design

facility, the difficulty of leather firms in developing newer designs in conformity with the

latest trends and international standards may be addressed.

Pavers Foresight has set up a world-class footwear design development studio, supported

by a shoe-making unit under a wholly-owned subsidiary called York Shoes at Ambur in

Tamil Nadu, one of India's prominent leather belts, at an investment of $3 million. The

design studio and the shoe-making unit, which have come up on a three-acre area,

commenced operations recently.

The studio is the first of its kind in India and will help companies develop European

comfort footwear customised to the needs of Indian consumers. "York shoes pvt ltd’s

objective is to get western design and development for the Indian market. European

designs will be transferred here through our new studio, which will work with product

development and design teams in Europe, China and Brazil, with manufacturing support.

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York Shoes is in discussion with a few top international brands for design tie-ups and

hopes to conclude some agreements shortly.

The manufacturing unit of York Shoes at Ambur will initially have a capacity of 2.5 lakh

pairs a year and it will be scaled up based on the demand. They have also forged

agreements for component sourcing from China. The Ambur operations are expected to

generate 300 job opportunities.

At present, the leather industry lacks design capabilities. Most exporters, be it in footwear

or other products, supply to private labels, retail stores and major brands. None of the

Indian leather exporters owns a reputed, multi-market and well-known brand of their own

due to difficulty in making latest designs. Indian exporters most of the time reproduce the

designs developed by the brand owners and are not in a position to demand a price for

their product, according to a representative of leather industry association.

Pavers Foresight Smart Ventures Ltd, an equal joint venture between London-based $450

million Foresight Group and $150 million Pavers Ltd, footwear retail major in UK, has a

$60 million war-chest to invest in India in a few sectors, including leather.

www.pavers.co.uk

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2.1 DEVELOPMENT & TESTING:

A dedicated R&D lab at York shoes pvt ltd constantly researches for the latest trends and

colors in leather. Marketing teams frequently visit important fashion destinations in

Europe and USA to bring back feedback on the latest trends and fashion. Based on this

new articles are developed continuously and presented to valued customers. The tannery

also engages the services of designers from Europe and USA to create the latest color

palettes which are incorporated in all its articles. The R&D lab has an independent team

of workers, technicians and equipment to develop new leathers, work on standardisation

of process and churn out samples on a daily basis for customers.

York Shoes is a producer of fashion comfort shoes with in-house design and development

facilities. With a capacity to make 3000 pairs/day, York shoes produces high quality

men’s shoes and ladies boots. York shoes specialises in corner stitch shoes, strobel,

cements and moccasins.

R&D cell of the Company.

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2.2 CRAFTMANSHIP:

With over 20 years of experience in shoe making, York shoes has a team of highly skilled

& dedicated workers and technicians who bring out the best in quality during production.

The team is highly skilled in doing precision operations like stitching or lasting in various

constructions including cement, strobel, moccasin or lady boots. The factory caters to the

demands of top brands across the globe and has gained excellent expertise over time.

Craftmanship

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CHAPTER-3

RESEARCH DESIGN

3.1 AIM:

This project aims to study the challenges faced by leather manufactures in and around

ambur and the strategies they are taking to overcome the same.

3.2 OBJECTIVES:

1. To assess the problems being faced by the leather product manufacturing units.

2. To assess the survival strategies of the leather product manufacturing units.

3. To assess and analyse the impact of globalization on indian leather product

manufacturing units.

4. To examine the impact of government measures to support leather product

manufacturing units.

3.3 PURPOSE OF THE STUDY:

Ambur is known for its leather industry and many leather exporters in india have their

manufacturing units in and around the place.

But due to environmental concerns such as pollutions by the leather tanneries smaller players felt

their business became unviable and larger players felt that their business was being tested across

levels for their very survival.

The purpose of the study is to address these concerns and obtain first hand data from many of the

manufactures of the leather goods and showcase YORK SHOES PVT LTD as an illustrative case

and how they are able to survive in an industry with restrictive external atmosphere.

This case studies in-depth the problems faced by the industry and is chosen for an illustrative

purposes with the notion that it is one of the small time companies which exports most of its

products.

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3.4 RESEARCH QUESTIONS:

1. What are the problems faced by the different functional areas by the management

in the leather industry?

2. What are the key strategies adopted by the companies in the leather industry to

remain competitive?

3. The effect of quotas with the leather manufacturing industry.

4. Measures adopted by the government to help the industry.

3.5 RESEARCH DESIGN

The survey method is used to study the various market and industry variables related to

the stated problem. For this a standardised questionnaire is used and administered to

various key managerial personnel across functions in the chosen company also a

questionnaire is administered to different companies in the region to get a generalised

response to the common industry problems.

Since the study is limited to Ambur, only companies of similar size are chosen randomly

to get a first hand response which they all collectively face in the industry as a whole.

Purposive sampling is used to collect primary data this is supported by secondary data

from company, industry and trade journals.

3.6 SAMPLING PLAN

Sampling Method – Purposive Sampling

Sampling Size And Unit – 20 Companies In And Around Ambur

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3.7 METHODOLOGY

Both descriptive and inferential methods are used to study the various variables of the

project in line with the objectives. The study may include frequency analysis,

descriptive analysis, cross tabulation, modelling, correlation analysis, regression

analysis and /or hypothesis testing if needed. Both univariate and multivariate

methods may be used depending upon the nature and quality of the data. Before the

actual analysis is carried out the questionnaire itself is tested for its reliability as an

instrument and internal consistency of responses.

3.8 TOOLS FOR DATA COLLECTION:

As stated above a standardized questionnaire is used to collect primary data and to study

the variables related to industry, company and environment

3.9 LIMITATIONS

Since the project attempts to study sensitive information which have to be obtained from

companies across the chosen area its limited in terms of sample size but compensated by

the depth of the study. The project researcher is bound by an NDA (Non-disclosure

agreement) and hence some of the data though relevant and crucial may not be taken or

disclosed for obvious reasons.

Hence only a peripheral study is done whereas an in-depth study could be attempted for

policy research for those wishing to pursue higher research studies.

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CHAPTER-4

LITERATURE SURVEY:

The Leather industry is known to be very polluting especially through effluents high

in organic and inorganic dissolved and suspended solids content accompanied by

propensities for high oxygen demand and containing potentially toxic metal salt residues.

Disagreeable odour emanating from the decomposition of protein solid waste, presence

of hydrogen sulphide, ammonia and volatile organic compounds are normally associated

with leather tanning activities.

A significant part of the chemical used in the leather processing is not actually absorbed

in the process but is discharged into the environment.

Liquid effluent from light leather processing contains organic matter, chromium,

sulphide, and solid waste includes fleshing, wet blue splits, trimmings and shavings,

buffing dust etc. The substantial relocation of leather production from the industrialized

countries to the developing countries which occurred between the 1960s and the 1980s

(known as "The Big Shift") in effect moved the most highly polluting part of the process

away from the OECD countries.This occured under the pressure of increasing cost of

labour and cost of effluent treatment installations and operations. This process was

accelerated by a combination of restrictions in exports of raw hides and skins and various

incentives for higher processing levels provided in developing countries.

Since over 80 per cent of the organic pollution load in terms of BOD comes from early

wet processing, this is the primary target of most pollution control measures. Low waste

technologies, generally speaking, require better skilled personnel and closer technical

control than conventional processing. Thus, the lack of properly trained staff at different

levels remains one of the crucial constraints. The main barriers to the adoption of more

environmentally acceptable methods of leather processing and effluent treatment are the

additional costs as follows: specialty chemicals required in reducing or eliminating the

use of the main polluting chemicals; the cost of purchase and installation of water

conservation devices, wastewater collection and reuse equipment; effluent treatment

chemicals and process and effluent monitoring equipment; extra personnel and training

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to maintain technical control of low waste technologies and effluent treatment. Another

factor is the traditional conservatism derived from hesitation over process alterations

especially when satisfactory leather is being currently produced. This is particularly the

case in small to medium scale semi-mechanized family owned units. Another barrier is

the frequent remoteness of government-backed R & D facilities from everyday

practicalities of leather- making, together with reluctance on the part of traditional tanner

groups where resistance to change is compounded by political influence.

The beam-house (un-hairing) and the tan-yard require cleaner technologies in leather

processing. Also utilization of chrome-free solids as by-products and disposal of chrome

containing sludge are possibly the main issues that need particular attention. However,

legislation enforcement agencies lack skilled personnel to monitor performance of

installed treatment plants. The cost of introducing a cleaner processing method may be

prohibitive and beyond reach of a small scale tanner. The price of a special drum for hair

save unhairing with the necessary auxiliary equipment may be as much as twice the

conventional drum. Enzyme unhairing needs very accurate control and consistency of all

parameters (pH, temperature, float, etc) which is possible to achieve only in rather

sophisticated Leather industries and it is associated with higher production costs (partly

off-set by lower wastewater treatment expenses). High chrome exhaustion leather

tanning requires very expensive specialty chemicals, normally proprietary products.

Effluent treatment costs depend on specific site conditions, and vary within a very wide

range.

4.1 ISSUES

4.1.1 THE INDUSTRY’S GLOBAL PERSPECTIVE

The leather and its related downstream industries can claim to be the world's largest

industrial sector based upon a by-product. In the case of leather, the raw material is a by-

product of the meat industry. Hides and skins and their downstream products are vital

earners of foreign exchange and they compare very well with the other agricultural

commodities and, in fact, with any internationally traded commodities. This industry

helps convertible a putrescible material into a stable and marketable product.

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4.1.2 HIDES AND SKINS PRODUCTION AND TRADE

Dependence on the market for meat:

Availability of hides and skins is governed mainly by the demand for red meat. A

governing feature of the leather industry is in the elastic nature of its raw material supply.

The bulk of bovine hides and ovine and caprine skins in industrialized countries are

marketed to the leather industry and thus the number of heads slaughtered is roughly

equivalent to the number of hides and skins available. A significant part of hides and

skins is lost to Leather industry people mainly in least developed countries in Africa

owing to lack of marketing infrastructure, monopolies of various kinds or diversion into

other uses such as food, tents, ropes, etc. Bovine hide is by far the most important raw

material for the leather industry. Off-take ratio (i.e. weight per hide and skin) is very high

in developed countries as compared to the developing countries which contribute about

70% of world bovine hide.

Change in global pattern of demand for hides and skins:

The leather industry has expanded substantially in the developing countries. A

consequence of production expansion in some developing countries is that Leather

industry input demands have outstripped locally available supplies and imports from the

developed countries have become essential.

4.1.3 ENVIRONMENTAL IMPACT OF LEATHER INDUSTRY

The leather sector is well known for its effluent problems. The polluting nature of

Leather industries is evident from the notorious odour that characterizes Leather

industries and Leather industry zones. While local populations are daily aware of the air

pollution, local authorities are equally, if not more concerned about Leather industries'

liquid effluents which tend to be high in organic and inorganic suspended solids content

accompanied by propensities for high oxygen demand and containing potentially toxic

metal salt residues. Treatment technologies in effect reduce pollutants in the liquid form

and convert them into semi-solid or solid forms. Threat is being transferred from

receiving waters to receiving land. Because sludge can affect the quality of soil and

groundwater, it is understandable that local authorities and governments should be

concerned that the disposal of sludge to soils and dry wastes to landfill should not

adversely affect the fertility of soil, nor that metal salt residues, such as chromium,

should inhibit crop growth in any way.

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4.1.4 MARKET EXTERNALITIES

Economic, political and technological developments in several industries impinge

upon the future characteristics of the leather industry, covering all contingent industries

from livestock agriculture to finished goods industries and the markets that they serve.

With the growth in the purchasing power of people, there is always an increased demand

for inexpensive leather.

4.2 CHALLENGES

4.2.1 TECHNICAL BARRIERS

By nature, Leather industry people are very conservative. This is not simply obstinacy

against change; it is because the quality and character of leather is prone to change when

the parameters of processing are altered. Changes in the length of processes, process

temperatures, float volumes, uptake of chemicals etc. influence the ultimate character of

the leather. Leather being produced from a complex, non-uniform natural protein material

still requires considerable craft in its manufacture. The adoption of low waste technology

often requires a radical alteration of most Leather industry processes while, at the same

time, ensuring that the ultimate product retains its marketable properties. Therefore if a

tanner is producing consistent quality of leather which satisfies his customers using a

process which may be wasteful in water, energy and chemical utilization, he may resist

altering his operations to comply with environmental demands.

4.2.2 SMALL AND MEDIUM ENTERPRISES

In most developing countries leather tanning operations is a family business, carried

out in small to medium scale semi-mechanized units, very frequently grouped tightly in

clusters which used to be outside residential areas. Leather industry people in such units

have no formal education and have little or no understanding of the complexities of the

leather processing, their skills acquired from their elders with hardly any perception of

environmental protection Low waste technologies, generally speaking, require better

skilled personnel and closer technical control than conventional processing. Thus, lack of

properly trained staff at different levels remains one of the crucial constraints.

4.2.3 ECONOMIC BARRIERS

In developing countries, leather industry suffers from economic constraints. They

suffer the often inordinately high cost of capital or inflation rates. Amount of capital tied

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up in work in-progress has increased along with the necessity to keep higher inventories

of chemicals, machinery spares, etc. Because of problems with poor infrastructure in

many developing countries, the Leather industries have always kept higher stocks of

chemicals than their counterparts in developed countries, against the contingency of

delays in delivery from ports. Another disadvantage is the imposition of import duties on

chemicals and machinery. Few specialty chemicals for leather tanning are produced in

developing countries, although basic chemicals such as salt, lime, sulphuric acid, sodium

sulphate or sodium carbonate may be available indigenously. Most leather tanning

materials, dyes, fat liquors, special auxiliaries and finishes need to be imported.

4.2.4 INADEQUATE LEGISLATION AND LACK OF MONITORING

FACILITIES

Pollutant discharge standards in most developing countries are by nature rigid and

have a disregard for specific site conditions. Instead of a gradual approach as called for

which would phase installation of treatment facilities (for example the physico-chemical

first followed by the biological treatment and appropriate sludge handling) a tanner is

under pressure to put up a complete treatment system and meet all discharge limitations

at once which is beyond his financial and technical means. However, very few Leather

industry people have the necessary process and effluent treatment control facilities and

legislation enforcement agencies usually lack skilled personnel to monitor performance

of the installed treatment plants.

4.2.5 SOCIAL BARRIERS

Governments often feel inhibited from dealing with problems related to modernising

of the Leather industries because of the social and even political upheaval that would

occur. The problem is further exacerbated where Leather industry people are traditionally

regarded as socially inferior because of the nature of their work. These groups, because

of traditional discrimination, have amassed considerable political privileges.

Consequently there are difficulties in altering the structure of artisan industry.

4.2.6 TECHNICAL ASSISTANCE LABORATORIES

Most of the major leather and footwear producing developed and developing

countries have research and development laboratories and technological teaching

facilities. It is usual that either the R & D laboratories or the teaching establishments, or

both, have pilot Leather industries in which technological developments are taken a stage

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further towards commercial leather production by industry. Some of these have pilot

effluent treatment facilities which are of benefit in helping the local industry adopt

relevant methods of emission limitation and treatment. Nevertheless there remains a

problem in transferring technology from laboratory and pilot plant of an R & D to

practical everyday use in the industry.

The objective of this study is to analyze the leather industries in Ambur, T.N.,located on

the southern bank of the river Palar to study the technology adopted by Leather industries

in production of leather from hides and disposal of solid and liquid waste. The

motivation towards this work is to investigate the role played by government in

promoting social, economical and environmental concerns related to leather industry.

The focus has been towards describing how different issues and interests result into

conflicts and how does it affect the socio-economic environment.

4.3 LEATHER MANUFACTURING PROCESS:

The processing of hides and skins into leather is a complex procedure that requires a

precise combination of many chemical and mechanical operations. A step-by-step

diagram of these processing operations is shown in Figure 3.1.

4.3.1 CURING: Deterioration begins immediately when a cow is killed. After the hides

are removed from the carcass, they are salted through and through at the slaughterhouses

to prevent decay. After they are salted, 55% of the water in the hide is removed, and they

are dried for 3 to 6 days. The rawhides are then sold to Leather industries.

4.3.2 SOAKING: In order for the leather tanning process to work properly, the dry

salted hides must be washed free of the salt. This is done by soaking the hides in water to

which chemical wetting agents (similar to household detergents) and disinfectants are

usually added for 8 to 20 hours, depending on the thickness of the hides. This soaking

procedure rehydrates the hides to their original flaccid condition and removes the dirt.

4.3.3 DE-HAIRING: The hair must now be removed from the hides. This is done by

soaking the hides in chemicals, or depilatory agents, which destroy the hair by attacking

the hair root so it will release freely from the hides, loosen the epidermis, and remove

certain soluble skin proteins that lie within the hide substance without destroying the

desirable collagen of the hides.

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4.3.4 FLESHING: Excess flesh, fat and muscle must now be removed from the hides.

This is done with a fleshing machine.

4.3.5 DE-LIMING: All the depilatory chemicals must now be removed from the hides.

This is done by washing the hides in ammonium sulfate or ammonium chloride and then

clear water in big drums. These chemicals not only clean the depilatory chemicals from

the hides, they also adjust the acid-alkaline conditions (pH) to the proper point for

receiving the bate, which are enzymes similar to those found in the digestive system of

animals. When the bates are applied, they attack and destroy most of the remaining

undesirable constituents of the hide.

4.3.6 PICKLING: The hides must be placed in an acid environment (low pH) so they

will be ready to accept the leather tanning materials, because chrome leather tanning

agents are not soluble under alkaline conditions. This is accomplished by adding salt and

acid to the hides. This is a preserving process in itself, and hides can be kept in this state

for extended periods of time without any deterioration.

4.3.7 LEATHER TANNING: The raw collagen fibers of the hides must be converted

into a stable product which is no longer susceptible to rotting. This is done by adding

chrome leather tanning agents to the hides in a revolving drum. These leather tanning

agents also significantly improve the hide's dimensional stability, abrasion resistance,

resistance to chemicals and to heat, the ability to flex innumerable times without

breaking, and the ability to endure repeated cycles of wetting and drying.

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19 | P a g eGeneral flow diagram for leather tanning and finishing process

4.3.8 WRINGING: The excess moisture must be removed from the hides. This is done

by placing each hide through two large rollers similar to those on a clothes wringer.

4.3.9 SPLITTING: The hides must now be split into the desired thickness. Unsplit hides

average to be 5mm thick. The thickness for upholstery leathers range from .9mm to

2.0mm. The hides are put through a splitting machine that is set to split the hides to the

desired thickness. It cuts the top grain off first. Another layer, and sometimes two, is cut.

These layers are called splits.

4.3.10 SHAVING: The thickness of the hides must be made uniform all over the hide.

This is done with a shaving machine through which the hides are run. The helical shaped

cutting blades level the overall thickness to exact specifications and open the fiber

structure to better receive subsequent chemical processing.

4.3.11 RE-LEATHER TANNING: This process is done to impart special end-use

properties with other leather tanning chemicals. The substances used add solidity and

body to chrome leather and help minimize variations in the character of the leather that

may still exist between different parts of the hide.

4.3.12 COLORING: As soon as the releather tanning process is completed, aniline dyes,

derived primarily from petroleum and added to very hot water, are added to rotating

drums to penetrate the hides for desired color.

4.3.13 FATLIQUORING: This is the last of the wet chemical operations to which the

leather will be subjected. Fatliquoring has the most pronounced effect on how soft leather

will be and it contributes greatly to its tensile strength. The more fatliquors that are

added, the softer the hides will be.

4.3.14 SETTING OUT: This operation smoothes and stretches the hide, while

compressing and squeezing out the excess moisture. This puts the hides in the proper

condition for drying.

4.3.15 TOGGLING: The hides are stretched across a perforated frame and held in place

with clips called toggles. One hide is clipped to each side of the frame. The frames are

then slid into channels in drying ovens.

4.3.16 STAKING: Leather is staked to make it pliable. In combination with the correct

fatliquoring treatment, staking governs the final firmness or softness of the leather.

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4.3.17 DRY MILLING: The hides are placed in a large dry drum and tumbled until the

desired softness is obtained.

4.3.18 BUFFING: This process improves the final appearance of the hides by lightly

sanding the surface to remove some of the natural imperfections such as scratches, healed

scars, etc. It provides the hide with better cutting yield.

4.3.19 FINISHING: This process applies film-forming materials on the surface of the

hide. Here is where layers of pigments are added if required. This process also adds the

protective sealant to the surface.

4.3.20 PLATING: This is the final step in the leather process. During this process, heat

presses a chosen grain into the surface of the hides.

4.4 GOVERNMENT REGULATION AND SUPPORT

Since pollution is considered an externality, i.e. a cost of production that is not

included in a product’s market price, it is also considered a market inefficiency that the

government could (or should) regulate to correct. Environmental regulation is the single

most important factor to influence firms to consider environmental issues. But do

regulations automatically result in implementation? Or what needs to be in place for the

firms to take the regulations into action? A firm’s decision to comply with regulation is

connected to the cost of non compliance, meaning that the regulations need to be

enforced by some controlling authority capable of presenting real negative threats (such

as a fine or a penalty) for the industry in question for firms. The decision of how to

respond to environmental regulations is based on a consideration of the potential

economic benefits or disadvantages of complying and not complying. Firms that are

more restricted financially (often smaller firms) are less likely to formulate an

environmental plan than firms that are better of. Hence, less profitable firms are more

likely to have a lower environmental performance. In addition, the regulators must have

the administrative capacity to enforce the regulations.

For the leather tanning industry, there are no international regulations, only domestic.

However, the want to increase exports may induce governments and firms to let

regulation other than the domestic influence production activities. The Government of

India has announced various initiatives to make the leather industry more competitive.

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Key policy initiatives include:

1. De-licensing of integrated Leather industries that convert raw hides and skins into

finished leather. Several leather goods have been de-reserved from the Small Scale

sector.

2. Free import of raw hides & skins, semi-finished and finished leather.

3. Concessional duty on imported machinery and chemicals.

4. Free export of raw hides & skins, semi-finished and finished leather and leather

products.

5. Policies to facilitate modernisation / upgradation: In June 2005 the government

initiated a US$ 64 million ‘modernising scheme’ called the ‘Integrated Leather

Development Programme’, whereby all leather leather tanning and product units

would be eligible for modernisation assistance. The assistance would be to the extent

of 30 per cent of project cost for SSI units and 20 per cent for non-SSI units,

subjected to a ceiling of US$ 110 thousand per unit.

6. Setting up of leather parks: An outlay of US$ 24.5 million for setting up five leather

parks — two in Chennai and one each in Nellore, Agra and Kolkata. 12 The Council

for Leather Exports has estimated that this scheme would generate a total investment

of US$ 267 million in about three years.

7. Establishment of ‘design centres’ at individual manufacturing units, to facilitate

improvement in design capabilities: Under this scheme, 25 per cent of the project

cost was provided to the units under the market access initiative scheme of the

Ministry of Commerce and Industry. Several individual units have come forward to

establish their own design centres.

For the leather tanning industry in India, the main focus of the regulations has been on

water pollution rather than problems related to air pollution and solid waste. In Ambur,

water pollution issues came into focus with the Palar Action Plan, established by the

Central and the UP governments in 1985. The GAP required that the water quality should

be monitored and primary treatment of effluents should be undertaken. Under the GAP,

another project, aided by the Dutch development agency, operated from 1987 to 1994

with the mission to prevent pollution of the river Ganges and improve living conditions

of people in Ambur. Among other things, this project included the construction of the

CETP to treat Leather industry effluent. The regulations that the Leather industries have

to meet today are all related to water pollution, and the regulations have remained

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unchanged during the 1990s. There are certain standards for pH, total suspended solids,

sulfides and chrome that the Leather industry effluent shall not exceed. Hence, all

Leather industries are required to treat their effluent before letting it out either to the

sewer system or to a river. Different standards apply according to whether the Leather

industries are connected to a CETP or not. For Leather industries that are connected to a

conveyance system that goes to the CETP, in Ambur, it suffices to have a primary

treatment plant (PTP) where sludge in the effluent can settle and where the pH is

adjusted14. This means that the water they let out of their plant should contain no more

than 600 mg per liter of suspended solids, 45 mg per liter of chrome and the pH should

be in the range of 6.5 to 9.0. The purpose of this cleaning is mostly to avoid clogging of

the conveyance system before the effluent reaches the CETP where most of the treatment

is supposed to take place. The Leather industries that are not connected to a CETP have

to meet the more stringent standards equal to those that apply to the CETPs. For them,

pH should be in range 6.5 to 9.0, COD should be less than 250 mg/l, suspended solids

100 mg/l, sulphide 2 mg/l, and chromium 1 mg/l. To achieve this, they need to have their

own individual effluent treatment plants (IETP) that takes care of both primary and

secondary treatment, it is not enough to only have a primary treatment plant to settle and

take out the sludge.

To enforce these regulations, the state pollution control board (SPCB, in this case the

UPPCB) is the authority. They have the right to go for inspections in all Leather

industries, at any time and without warning, to check that they have a PTP and that it is

being run properly. They may also take water samples from the water that is let out from

the PTP. If the values of the test results exceed the standards, the Leather industry is

given a warning, but no fine, and if they do not comply properly with the regulations, the

SPCB can shut the Leather industry down. The regulations are backed by the Supreme

Court (SC), and if closed down, the Leather industry will have to wait for a long time

before their case can be processed by the court. The SPCB is also supposed to monitor

the operation of the CETP, but since the SPCB is the government, and the CETP is run

by the government, the control function is less than towards the Leather industries which

are private sector.

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4.5 METHODOLOGY

The survey was aimed at gathering information from different sources that play role in

leather manufacturing and are affected by the after effects of the production. In order to

assess the level of technology used in leather production and waste disposal technology,

Leather industries located in Ambur were selected since most of the small scale and large

scale Leather industries are concentrated in this area. Some 380 odd leather units are

located in Ambur area, right on the bank of river Palar. These units, which use many

toxic chemicals, are the single largest contributor to the pollution of the surface as well as

groundwater of Ambur area.

After this in order to determine social impact of leather production on the nearby society

and workers, labor working at the waste disposal site and the villagers of the nearby

village were interviewed. And finally, an officer incharge of WasteWater Treatment Plant

was consulted to assess the effluent treatment technology used in cleaning the effluent

coming from Leather industries.

4.6 COVERAGE

Most of the Leather industries are located in Ambur, an area south-east of the city and

on the southern bank of the river Palar. This location was optimal in the early days,

because the leather tanning activity was kept outside of the city area (so that stench and

waste would not be a problem for the city dwellers). Also, to have access to water was

important because the leather tanning industry has a high consumption of water. Today,

the area of Ambur is crowded, not only with Leather industries, but also with the houses

of the people living there. Ambur is no longer separate from the city, and most of the

people living there are workers in the Leather industries. Many of the Leather industry

owners also live there, even though Ambur is considered a very poor area. The area has

narrow dirt roads with no drainage and no light, and litter and waste from the Leather

industries are everywhere

4.6.1 LEATHER INDUSTRIES

No Leather industry allowed us to enter into their building. Several excuses like the

chief not being available, Leather industry not working (although the chimney was

emitting black smoke) were given.

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4.6.2 WORKERS

Three labourers were working in collecting slush, the watery mud and spreading out

in open to be heated and dried by sun. The dried mud consisted of leather waste and

remains of hides. These hides are boiled to produce adhesives, organic manure and

chicken feed. The fumes emanated from these factories pollute air and discharge foul

smell much to the dislike and annoyance of the residents of the area. But despite these

effects, when the workers were asked about the consequences and their willingness to do

such kind of work they replied that there are no after effects of this work, they do not

sustain any kind of skin or breathing disease, there is no wastage from Leather industries,

everything that Leather industries release are disposed in one or another way, there is no

damage to soil by the effluent rather it contains elements that make land more fertile.

4.6.3 PAN WALA

A Pan Wala, resident of a nearby village was interviewed and gave information

regarding the kind of pollution that Leather industries of the area cause to the

neighborhood. He told that agricultural fields are destroyed because the water which is

used for irrigation is highly toxic. A lot of air pollution is caused by the bhattis (illegal

glue factories) which burn leather. He complained that the open channels that drain into

river Palar contain black water and stink heavily. He talked about problems faced by

villagers and lack of appropriate measures by government to tackle their problems.

4.6.4 VILLAGERS

Residents of village named ‘Thuthiput’ were interviewed to state their problems with

the pollution caused by Leather industries. They told that people suffer from diarrhoea,

cholera, skin diseases and spontaneous abortions. They showed swollen spots on chest

and damaged nails. They gave instances when cattle kept jerking their neck, lied down

and then died. They also said that sick animals gave lesser milk. They found isolated

from the rest of the world and felt that there polluted surroundings has harmed their

relationships with people from other villages. They told that people are reluctant when it

comes to marrying a person from this village. When asked about the efforts they have

made to raise their voice against this problem, they told that they have send mails to

district magistrate, but no support has come to their rescue. They said that on the letter

addressed to the President of India explaining the situation faced by the people, High

Court ordered for the closure of the bhattis but these became operational again and now

operated in night instead of the day time. This worsened their problems and made it

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extremely difficult to sleep in night. They blamed the politicians who themselves are

owners of Leather industries and said that these people bribe policemen and condemned

system for taking bribes.

4.6.5 WASTEWATER TREATMENT PLANT

A senior officer managing the operation of wastewater treatment plant was

interviewed regarding the kind of technology being used in the plant, quality of effluent

released for irrigation and disposal of waste. He explained us the entire process of

Leather industries and domestic wastewater treatment. He told that main component of

contamination is organic loading which is represented in terms of Biochemical Oxygen

Demand (BOD) and inorganic load as Total Dissolved Solids (TSS). When asked about

the efficiency of the plant, he told that the plant is working undercapacity at an efficiency

of around 65%. This he said is due to lack of funds available for operational and

management costs. He told that the wastewater is highly corrosive and damage iron bolts

and pipes. He even showed us pipes colored green that were made of special kind of fibre

which was resisting corrosion since the time when the plant was established even

showing signs of corrosion. He told that as per the directive of Supreme Court, the

Leather industry people are supposed to share the operation and management costs of the

plant on 50:50 bases. Both have diverted from their commitments. When asked to

comment on the presence of high traces of toxic elements like chromium in the effluent

discharged from the plant, he said that it is the responsibility of Leather industry people

to remove chromium from their effluent. He told that Leather industry people producing

more than 50 leather hides per day, big Leather industry people, are installed with

chrome removing facility but they do not abide by the law and do not care for the

environmental degradation. He told that it is favourable to remove chrome at the source

because it is easier and beneficial from the tanner’s point of view since he can convert

the hexavalent chrome to trivalent chrome and recover it to save his cost on raw material.

But their ignorance has not only elevated problems for them but also created problems

for the environment. For Leather industry people producing less than 50 leather hides per

day, small or medium Leather industry people, effluent is brought through tankers and

treated

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4.7 ANALYSIS OF PRIMARY AND SECONDARY INFORMATION:

India’s leather industry occupies a prominent role in international trade, generating

foreign exchange and providing employment. The industry employs more than 2.5

million people. Much of the economic benefits derived from leather production and trade,

however, have typically come at considerable cost to the environment and human health.

The case study has presented important findings and analyses, leading to an enhanced

understanding and appreciation of the multiplicity of barriers and opportunities for the

further development of the Indian leather sector. The problems faced by leather industry

in India shows the very nature of the Indian economy. It shows how democratic structure

shatters when every individual defends his failures with other’s shortcomings. As for the

common man, this ignorance has led to financial, social and health related problems and

they feel desolated on their own land. The following section gives the analysis of role

played by different players:

4.7.1 GOVERNMENT

The leather industry in Ambur used to flow unabated into Palar through

drains. A conveyance system was built under GAP-I in which Intermediate Pumping

Stations (IPS) were used to collect and carry Leather industry effluent to the CETP.

Untreated Leather industry effluent is still discharged into Palar, owing to malfunctioning

of the IPS. Thus, despite four intermediate pumping stations along the Palar intercepting

and diverting the waste to the main pumping station, over 60 per cent of Ambur’s 360

million litres per day (MLD) sewage and 9 MLD effluents are dumped into the river.

Some Leather industries have even bored holes in their premises, and dump the waste

directly into the city’s aquifers.

Also, the waste that reaches the treatment plants from the main pumping station is ill

managed. The plants rarely function due to power failure. Lack of electricity has

rendered dysfunctional the infrastructure set up under GAP’s first phase. This has

resulted in discharge of sewage and effluents rich in hexavalent chromium, a known

carcinogen, supplied for irrigation. Such occasional functioning also means the

chromium-rich sludge is dumped carelessly. Lack of proper controls, corruption in

bureaucracy and insufficient fund transfer to CETP reveals the true attitude of

government towards handling the problems.

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4.7.2 CETP

The Common Effluent Treatment Plant (CETP) is not equipped to deal with

chromium. The plant works under capacity due to insufficient money supply from

Leather industry people and government. This result in increase in concentrations of

chemical constituents beyond their standard levels laid down by government. The

chromium released by the Leather industries goes untreated to join river Palar or

agricultural land for irrigation.

4.7.3 INDUSTRIALIST

The most important explanations of firms’ non-compliance with environmental

regulations are that the enforcement of the regulations is poor and fraudulent, that many

of the Leather industry people believe their activity does no harm to the environment,

that there is no customer or market demand for cleaner production. There is a difference

between ‘cleaning’ and cleaner technology. The firm using cleaner technology will only

have an advantage in International markets where they would be competing firms from

other countries having stringent environmental norms and would have a first mover

advantage in the sense that the native firm would take time in reaching that level of

technology. But this first mover thing is not valid in India because most of the countries

India export to have already implemented equally or more stringent environmental

norms. So this concept won’t apply for a developing nation exporting to developed

nation. Also, there are again bureaucratic obstacles to the paying for the CETP’s

operation. Since the politicians are also Leather industry owner, the antipollution drive is

often of no use as there are many ways to circumvent laws if lawmakers themselves are

involved in the process. They don’t install chromium recovery plants and argue saying

that they have done their part by contributing 17.5 per cent cost of the CETP.

Since the CETP in Ambur is a joint Leather industry waste and city sewer treatment

facility, many of the Leather industry-owners are critical to the fact that the leather

tanning industry is the only industry that has to pay. They claim that many other

industries are letting their waste into the general city sewer, and therefore should also

pay. Only the Leather industries should not pay because so many other industries are also

discharging their effluent into the same city sewer channel. Also, on top of these attitude

problems, there are misunderstandings on part of the Leather industry people’ either

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because of lack of information or because policies change with time, and makes it hard to

know what one is supposed to be doing. Also the operational price paid is not dependent

upon how much quantity water one use or discharge. Customer demand and government

pressure are the most important factors leading the firm to implement environmental

practices. Most of the Leather industries have a very short-time perspective for their

business, for some the survival is from year to year, for even smaller Leather industries

the operations is on and off on a monthly basis. With these short time frames, no one is

thinking of spending time and effort to develop a 5 or 10-year strategy on any issue.

4.7.4 COMMON MAN (FARMERS)

Chromium enters in food chain. These irregularities have had a disastrous

economical, social and health impacts.

4.7.4.1 ECONOMICAL: The yield of wheat, paddy and barseem (a local animal feed

plant) has reduced 50 per cent due to the use of contaminated irrigation water. Earlier

floriculture, mainly rose farming, sustained the economy of these villages. But these

roses stink. The size was also very small. The flower yield has dipped by 60 per cent.

Vegetables grown in these villages couldn’t be sold in the city even at very low rates.

This decrease in output strips the basic earning of farmers.

4.7.4.2 HEALTH: Glue-making units that use the waste (flesh) and other by-products

of Leather industries on the outskirts of most villages have aggravated the trouble.

Besides, the affected villages do not have primary health centres.

4.8 SUGGESTIONS AND CONCLUSIONS:

However negative these findings may be, there are opportunities to improve this

situation. A comprehensive, well synchronized action by respective governments,

industry, R&D and establishments, environmental authorities, international

organizations, etc. to address the main constraints mentioned earlier is a prerequisite to

achieving sustainable development in the leather tanning industry.

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4.8.1 GOVERNMENT REGULATIONS

First, there is an immediate need to stop the corruption that is making it possible

for the Leather industry people to get away with not cleaning their effluents as the

regulations abide them to. Second, there should be an increased reciprocity between

the Leather industry people and the CETP in Ambur so that the Leather industry

people would feel more responsible for the effluent let out by them to the CETP. The

focus on corruption is extremely important because it gives the Leather industry people

not only an opportunity to escape from cleaning their effluents as they should, but an

actual encouragement to not do so, because non-compliance with regulations is the

only way of having only one cost (for corruption) rather than two (for corruption and

cleaning). Hence there are not only no incentives to clean, but the corruption is an

actual impediment to clean. No matter how well the Leather industry people do in

cleaning, they still have to pay bribes. The need to end this corruption is therefore

urgent. It is also important to make sure that the PCB officers that are responsible for

the control of the Leather industries have enough skills to do the control properly, and

that they have the knowledge to teach the Leather industry people how to achieve the

standards if they are not meeting the norms at the moment of control.

4.8.2 EFFECTIVE MONITORING

Charge each tanner for the cleaning on the basis of how much effluent the Leather

industry emits. This would be possible by establishing a measuring unit at the end of

each tanner’s pipe, measuring the amount of effluent it creates before it goes in to the

common conveyance system. This would force the Leather industry people to be more

careful about their water consumption, and reduced water use could reduce the quantity

of chemicals used. An even better option would be to have measuring equipment that

could monitor the quantity of chrome and other chemicals contained in the effluent,

and that each tanner would pay according to these measures. This would further

encourage the Leather industry people to reduce their use of chemicals as well as it

would be another incentive to install recycling options such as chrome recovery plants.

One obstacle is that the installment of these measuring equipments could be expensive.

Instead, one could invent a system of discounts for Leather industries that had for

example chrome recovery plants, so that they would pay some percentages less for

their effluent treatment at the CETP than other Leather industries sending heavier

pollution loads to the CETP. The way in which the CETPs function today (based on 30 | P a g e

quantity of hides or water consumption), they are “anti-cleaner technology”

4.8.3 INTER LEATHER INDUSTRY MONITORING

A less technical alternative is to improve the environmental performance of the

Ambur Leather industry people by so-called “noisy monitoring”. This means that the

Leather industries should monitor and report on each other. This is possible because

already today the Leather industry people in Ambur are closely related and well

informed about each other’s activities. One would have to find a way to ensure

reporting and avoid “brotherhood” tendencies between the different Leather industry

people. Any reported defaulter should be highly penalised in addition to warning of

permenant closing down in case of any furthur disobeyence.

4.8.4 ECO-LABELLING

For the leather industry, there have already been suggestions to market vegetable

tanned leather as environmental friendly or give the leather an eco-label. This is

problematic both because it is not so certain that the vegetable tanned leather is any

more environmentally sound than the chrome tanned leather and anyway, there is not

a demand for such “clean” leather among the customers. It is hard to find good

standards that take into consideration both the product itself as well as the production

process, that suit all countries. Even though there are many challenges to the

development of such labeling, the efforts should be continued. Only by market

response would Leather industry people be forced to improve their environmental

performance.

4.8.5 FINANCIAL SUPPORT

Changes in the financial and in the insurance markets could be effective tools to

improve the environmental performance of the leather tanning industry. If better

interest rates on loans were given to Leather industries with a good performance, or

maybe a discount in the insurance premium, Leather industry people would strive to

achieve environmental standards. Special financial schemes can be floated for small

and medium scale enterprises.

31 | P a g e

4.8.6 QUALITATIVE BOOST

Despite the economic importance of the leather industries for the economies of

developing countries there is a discriminating attitude towards them because of the

high pollution level. The younger generation at colleges and technical institutions do

not find the leather tanning industry very attractive and are likely to select other

industrial options. Developing countries should work towards a qualitative up-

grading of the leather tanning industries. New industrial complexes should be

designed, on a modern basis, incorporating all possible equipment safeguards and

intrinsic safety features, to house new Leather industry units and relocate those

currently beset with serious pollution problems.

4.8.7 HUMAN RESOURCE DEVELOPMENT

Most of the developing countries are facing acute shortage of technically

qualified personnel for the operation, monitoring and maintenance of effluent

treatment plants for Leather industry wastes. Appropriate training and education

programmes are needed to cater for the needs of technical personnel at various levels

(operating, supervisory, managerial and design). There is an urgent need to prepare a

working paper which precisely identifies a training curriculum, type of faculty and

infrastructural facilities required for this purpose. The existing expertise and facilities

available in some of the developing countries should be taken into consideration and

if necessary they should be strengthened and made more broadbased to cater for the

regional needs.

4.8.8 DEVELOPMENT OF COMMERCIAL PLANTS

Pollution control technologies have to be techno-economically viable with

attractive financial returns for adoption in the traditional leather sector. The

technology packages should consist of in-plant control, end of the pipe treatment and

waste management components. There is a great need to set up demonstration plants

for common effluent treatment, in-plant process controls and Leather industry waste

utilization in the midst of Leather industries in selected developing countries in order

to enable them to see the performance of the new systems under field conditions. The

demonstration plants should also be utilized for training of technical personnel from

the developing countries. Adequate attention should be paid to the management of

32 | P a g e

the demonstration plants. Sharing of managerial responsibilities by the existing

Leather industries will promote the cause of smooth technology transfer and generate

a multiplier effect.

4.8.9 OTHERS

1. Good Housekeeping - water conservation at all stages of wet processing.

2. Savings in chemicals by introducing reuse-recovery-recycle systems can pay

for the simple equipment needed to run them, such as collection pits, pipes

and pumps.

3. Maximization of returns on Leather industry by-products, residues from

sludge and solid wastes (production of gelatine, protein powders and collagen

for sausage casings and medical and surgical films, glue, animal feed protein

and fertilizers, leatherboard, filter media, non-wovens, etc).

It is believed that by combining strict process control, good housekeeping measures

and cleanliness, introduction of recycling of some floats, predominantly aqueous

finishing together with simple treatment of wastes it would be possible to eliminate

nearly 50 per cent of the total pollution load discharged into the environment with

only marginal investment.

33 | P a g e

4.9 SWOT ANALYSIS OF THE LEATHER INDUSTRY

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 up-gradation

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 players

Opportunities

Rising potential in the domestic market

Growing fashion consciousness

globally

Use of information technology and

decision support software to help

eliminate the length of the production

cycle for different products

Use of e-commerce in direct marketing

Threats

Major part of the industry is

unorganised

Limited scope for mobilising funds

through private placements and public

issues (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

34 | P a g e

CHAPTER-5

ANALYSIS, INTERPRETATION AND FINDINGS The Indian leather Industry’s Export data.

India Leather Industry Statistics Data

Pairs of leather shoes the Indian leather industry can

produce annually960 million pairs

Annual revenue generated from the Indian leather

footwear industry$300,000,000

Pairs of leather shoes produced in India each year 700 million

India’s share of the global leather trade market 3%

Number of people employed by the Indian leather

industry2.5 million

Footwear share of Indian leather exports 10%

Top Ten Indian Leather ExportersShare of India Leather Industry

Tata International Ltd 12.40%

Florind Shoes Ltd 9.50%

Punihani International 7.20%

Farida Shoes Ltd 6.40%

Mirza Tanners Ltd 6.30%

T Abdul Wahid & Company 6%

Hindustan Lever Ltd 5.80%

Super House Leather Ltd 5.70%

RSL Industries Ltd 4.60%

Presidency Kid Leather Ltd 4%

35 | P a g e

General Leather companies business structure

5.1 DATA ANALYSIS OF YORK SHOES PVT LTD:

1. Percentage of companies who follow pollution control norms.

No of Companies PercentageYES 16 80%NO 14 20%Total 20 100%

YES80%

NO20%

Percentage of companies who follow pollution control norms

36 | P a g e

2. Percentage wise distribution of companies following eco-friendly environment

No of Companies PercentageYES 14 70%NO 6 30%Total 20 100%

YES; 70%

NO; 30%

Percentage wise distribution of companies fol-lowing eco-friendly environment

3. Percentage wise distribution of number of Companies contribution of growth of indian economy.

No of Companies PercentageYES 13 65%NO 7 35%Total 20 100%

37 | P a g e

YES65%

NO35%

Percentage wise distribution of  number of Companies contribution of growth of indian 

economy

4. Percentage distribution of source of labour for the leather industry.

Source of labour No of companies PercentageLocal (Ambur) 19 95%Outside 1 5%Total 20 100%

Ambur95%

Outside5%

Percentage distribution of source of labour for the leather industry

38 | P a g e

5. Is the income sufficient to handle the cost of living in ambur?

YES NO0%

10%

20%

30%

40%

50%

60% 55%

45%

Is the income sufficient to handle the cost of liv-ing at AMBUR?

6. Is the demand for products increasing in the recent past?

YES NO0%

10%

20%

30%

40%

50%

60%

40%

60%

Is the demand for products increasing in the recent past? 

7. What is your major source of income?

39 | P a g e

Export

Local sales

100%

0%

What is your major source of income?

8. What is the employment retention rate in your company?

0%

10%

20%

30%

40%

50%

60%

70%

80%

80%

The Employee retention rate in the company

Employee retention rate

9. Does the government subsidies favour the business?

40 | P a g e

0%

20%

40%

60%

80%

100%

120%

100%

Does the government subsidies favour the business? 

YES

10. Do you have the support of local people?

YES60%

NO40%

Do you have the support of local people?

11. Do you face any problem because of the contaminated ground water?41 | P a g e

YES NO0%

10%

20%

30%

40%

50%

60%

70%

80%

90% 85%

15%

Do you face any problem with contaminated ground water?

Series1

5.1.1 KEY DRIVERS:

Rapid response to development

Dedicated R&D centre for customer team

Dedicated conveyor with state-of-art machinery

ISO 9001:2008 controlled process

Professional work culture

Robust financial ability

5.1.2 CORE VALUES:

People-Rich combined experience of over 150 years

Professional team and approach to business

Strong R&D support

42 | P a g e

5.1.3 LEATHER DEVELOPMENT:

Leather development in association with Alpha spa, Italy

Robust Crust from Argentina

Dedicated leather development & supply resources for quality Sheep, Cow &

Goat.

5.1.4 INFORMATION TECHNOLOGY:

User friendly IT environment

End to end ERP system implementation

CCTV monitored with remote surveillance

5.1.5 COMPANY STRUCTURE:

Product focus is High quality Gents and ladies Shoes.

3,00,000 pairs of shoe uppers and full shoes annually.

Ample scope for expansion with the availability of own land.

Private limited company incorporated in India.

100% FDI(Foreign Direct Investment)

Robust financial ability to support business & growth from internal resources.

5.2 LEATHER INDUSTRY ANALYSIS IN DETAIL

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Structure of Leather industry

5.2.1 FINISHED LEATHER

Global Scenario:

The Global import of Finished Leather declined from US$ 23120.97 million in 2007 to

US$ 22151.29 million in 2011. India accounts for a share of 4.63% in the global finished

leather imports

A Statement showing global import of finished leather viz-a-vis India’s export and share

during 2007 to 2011 is given below:

(Value in Million US$)

2007 2008 2009 2010 2011

WORLD IMPORT 23120.97 21347.76 14907.56 19742.52 22151.29

INDIA'S EXPORT 807.19 673.37 627.95 841.13 1024.69

% SHARE OF INDIA 3.49% 3.15% 4.21% 4.26% 4.63%

44 | P a g e

2007 2008 2009 2010 20110

5000

10000

15000

20000

25000 23120.9721347.76

14907.56

19742.5222151.29

807.19 673.37 627.95 841.13 1024.69

World import vs India's Export of Finished Leather

WORLD IMPORTINDIA'S EXPORT

Major importing countries of Finished Leather:

(Value in Million US$)

Country 2007 2011

China 4344.26 4061.32

Hong Kong 3342.86 3114.25

Italy 3039.53 2936.82

Germany 855.49 971.10

Romania 843.52 729.19

Spain 677.37 709.67

Mexico 591.00 600.42

45 | P a g e

USA 791.71 584.12

France 458.95 563.97

Poland 586.47 526.33

Portugal 426.78 511.80

Korea Rep 500.07 464.78

Thailand 368.63 414.77

China

Hong Kong

Italy

German

y

Romania

Spain

Mexico USA

France

Poland

Portugal

Korea Rep

Thail

and

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Finished leather importing countries

20072011

These 13 countries together accounts for a share of 73.08% in global finished leather

import trade.

Top Exporting countries of Finished Leather

(Value in Million US$)

Country 2007 2011

Italy 5176.50 5043.55

Hong Kong 2772.82 2348.18

Brazil 2192.27 2044.63

USA 1144.04 1024.15

Germany 951.51 928.66

Argentina 963.68 916.89

46 | P a g e

Korea Rep 853.93 856.92

Nigeria 330.26 779.48

Italy Hong Kong

Brazil USA Germany Argentina Korea Rep Nigeria0

1000

2000

3000

4000

5000

6000

Finished leather exporting countries

20072011

Indian Scenario:

India has amongst the largest livestock population in the world, providing a strong raw

material base in goat, buffalo, cow and sheep leather. In terms of raw material availability

in pieces, India is endowed with 12.55% of Bovine hides & skins, 12.29% of goat and kid

skins, and 3.48% of Sheep and Lamb skins in the world.

The range of finished leathers include classic finishes (polish, glazed, aniline, patent),

matt surfaces (suedes, nubuck), nappa, burnished & oily leathers, crackled & distressed

finishes etc

Amongst the major producers of finished leather in the world, the Indian Leather Industry

has a long tradition of supplying high quality leather for the global market. Indian tanning

industry produces over 2 billion square feet of leather per annum. The Industry has the

tanning capacity to fulfill 10% of global leather requirements. Major tanning clusters in

the country are Chennai, Ambur, Ranipet, Kolkata, Ambur, Jalandhar etc. There are

approximately 2091 tanneries in the country – 45% in Tamil Nadu, 26% in West Bengal,

18% in Uttar Pradesh.

47 | P a g e

Livestock and Production Details: - INDIA

2005 2006 2007 2008 2009 2010 2011

Number of Bovine animals

(million heads)

279.71 277.51 297.70 304.41 309.90 316.40 320.80

Number of Sheep and Lambs

(million heads)

62.85 63.55 64.27 64.99 65.72 66.59 66.40

Number of Goat and kids

(million heads)

124.90 125.18 125.45 125.73 126.01 127.68 127.39

Production of Bovine hides

and skins  (mn pcs)

23.8 23.8 23.4 24.4 25.7 26.6 27.4

Production of sheepskins and

lambskins   (million pcs)

31.5 31.9 32.2 32.6 32.5 32.9 33.5

Production of Goatskins and

Kidskins  (million pcs)

72.0 72.0 72.2 72.3 72.0 73.0 74.3

Production of Light Leather

from Bovine animals (mn.

Sq.ft)

650.4 647.2 632.4 648.8 699.9 665.9

Production of Light Leather

from Sheep and Goats (million

sq.ft)

610.7 652.5 665.0 655.0 665.1 661.7

Source: FAO Statistics 2011

A Statement showing India’s export of finished leather

(Value in Million US$)

2006-07 2008-09 2009-10 2010-11 2011-12 2012-13

724.00 673.37 627.95 841.13 1024.69 1090.22

Source: DGCI& S48 | P a g e

India’s export of finished leather touched US$ 1090.22 million in 2012-13, holding a

share of 21.82% in India’s total export of US$ 4996.91 mn.

India’s Export of Finished Leather – Major markets

The major markets for Indian Finished Leather are Hong Kong 37.84%, Italy 13.50%,

China 9.06%, Korea Rep 3.90%, Indonesia 2.30%, Spain 2.56% and Germany 2.53%.

 (Value in Million US$)

Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Germany 34.60 26.77 22.02 24.17 28.91 27.64

USA 9.20 7.64 7.70 8.86 14.01 13.74

UK 2.87 3.42 2.69 3.33 3.75 4.03

Italy 140.44 99.40 75.15 126.14 166.29 147.15

France 10.11 6.28 8.71 9.69 9.74 10.57

Hong Kong 268.84 219.80 236.28 303.20 327.89 412.56

Spain 28.22 23.46 18.75 24.33 34.43 27.91

Netherlands 8.43 8.82 11.56 14.30 18.09 15.35

South Africa 13.27 9.29 8.52 13.46 16.40 13.31

Portugal 12.85 12.34 9.71 8.51 11.11 11.30

China 51.77 45.79 45.97 69.02 98.05 98.82

Indonesia 14.54 12.75 9.68 19.00 24.66 25.13

Korea Rep 28.35 23.49 27.65 29.47 35.55 42.49

Russia 9.77 6.95 3.35 9.29 10.82 6.62

Source: DGCI& S

49 | P a g e

German

yUSA UK

Italy

France

Hong Kong

Spain

Netherl

ands

South Afric

a

Portugal

China

Indonesia

Korea Rep

Russia

0

50

100

150

200

250

300

350

400

450

Indian finished leather export

2007-082008-092009-102010-112011-122012-13

Quantity-wise Export of finished Leather:

(In Sq.ft)

2011-12

Goat Leather 209,085,959

Buff Leather 268,321,760

Cow Leather 105,488,212

Sheep Leather 60,461,473

Buff Calf Leather 19,584,894

Cow Calf Leather 13,728,535

Upholstery Leather 53,489,016

Sole Leather 702,852

Others (Leather) 10,284,566

Industrial Leather 15,510

Total 741,162,777

50 | P a g e

Goat Lea

ther

Buff Leath

er

Cow Leath

er

Sheep

Leath

er

Buff Calf Le

ather

Cow Calf Le

ather

Upholstery

Leather

Sole L

eather

Others (Le

ather)

Industrial

Leather To

tal0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

Quality wise Export of Finished Leather

2011-12

CLE Membership Records

Region-wise Export of Finished Leather:

(In sq.ft)

2011-12

South 307,736,202

Central 328,610,785

West 25,609,998

East 44,299,793

North 34,905,998

Total 741,162,776

CLE Membership Records

51 | P a g e

307,736,202

328,610,785

25,609,99844,299,79334,905,998

741,162,776

Region wise Export of Finished Leather

SouthCentralWestEastNorthTotal

Strong infrastructures are in place for the leather tanning in the country. Eco-sustainable

tanning processes are being followed in the tanning industry. The tanning industry is well

supported by the presence of chemicals and auxiliaries industry. In the MODEUROP

Congress, colours presented by the India are selected continuously, which reinforces the

quality of India’s leather processing techniques. Indian finished leather finds the pride of

place in the global fashion markets

5.2.2 FOOTWEAR INDUSTRY :

The footwear sector is a very significant segment of the leather industry in India; rather it

is the engine of growth for the entire Indian leather industry.

India is the second largest global producer of footwear after China, accounting for 13% of

global footwear production of 16 billion pairs. India produces 2065 million pairs of

different categories of footwear (leather footwear - 909 million pairs, leather shoe uppers

- 100 million pairs and non-leather footwear - 1056 million pairs). India exports about

115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic

demand.

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The major production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu,

Mumbai in Maharastra, Ambur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal,

Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam. About 1.10 million

are engaged in the footwear manufacturing industry. 

Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes,

Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic,

P.V.C. and other materials. 

Brands sourced from India:

Footwear:

Acme,

Ann Taylor,

Pavers,

Bally,

Charter Club,

Clarks,

Coach,

Colehann,

Daniel Hector,

Deichmann,

DKNY,

Double H,

Ecco,

Elefanten,

Etienneaigner,

Florsheim,

Gabor,

Geoffrey Beene,

Guess,

Harrods,

Hasley,

Hush Puppies,

Kenneth Cole,

Liz Claiborne,

53 | P a g e

Marks & Spencer,

Nautica,

Next,

Nike,

Cole Haan,

Nunn Bush,

Pierre Cardin,

Reebok,

Rockport,

Salamander,

Stacy Adams,

Tommy Hilfiger,

Tony Lama,

Versace,

Yves St. Laurent,

Zara,

Johnston & Murphy,

Docksteps,

Timberland,

Armani,

Geox,

Diesel,

Ted Baker,

Lacoste,

Kickers,

Calvin Klein,

Sioux,

Brasher,

Zegna,

Massimu Dutti,

Buggatti,

Lloyd,

Christian Dier,

Salamander,

Camper,

54 | P a g e

Bata,

Espirit,

French Connection,

Legero,

Mercedez,

H & M and many more famous brands

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

brands sold in India.

MNC brands sold in India Indian Brands sold in india

Aldo, Red Tape,

Bally, Bata,

Clarks, Liberty,

Ecco, Khadims,

Florshiem, Lakhani,

Ferragammo, Metro,

Hush Puppies, Action

Lee cooper,

Lloyd,

Marks & Spencer,

Nike,

Nine West,

New Balance,

Reebok,

Rockport,

Stacy Adams,

Tod’s, Geox ,

Louis Vuitton

55 | P a g e

US Retail giant Wal-Mart has also begun sourcing footwear from India since the last two

years.

The Footwear sector is now de-licensed and de-reserved, paving the way for expansion of

capacities on modern lines with state-of-the-art machinery. To further assist this process,

the Government has permitted 100% Foreign Direct Investment through the automatic

route for the footwear sector.

Conducive Investment climate towards attracting overseas investments and increasing

cost competitiveness.

The Government of India is setting up dedicated Footwear Complex and Footwear

Components Part where footwear clusters are located.

There has been active interest in collaborating with Indian Footwear companies from

European countries like Italy, Spain and Portugal.

Footwear Imports Global Trend:

Major Importing Countries of Footwear (Leather and Non-Leather)

(Value in Million US$)

2007 2011Country

USA 20039.1

23245.1

Germany 5966.99

8527.62

France 5473.04

6538.01

UK 5281.55

5886.75

Italy 4529.77

5661.77

Japan 3750.04

5062.13

Hong Kong

4881.67

4850.3

Russia 2067.82

3935.95

Netherlands

2297.95

3716.65

Spain 2388.74

3114.08

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Belgium 2543.04

2427.09

Canada 1677.05

2089.43

Source: ITC, Geneva

USA

Germany

France UK

Italy

Japan

Hong Kong

Russia

Netherla

nds SpainBelgi

umCanada

0

5000

10000

15000

20000

25000

Major Importing countries of Footwear

20072011

Major Exporting Countries of Footwear (Leather and Non-Leather)

(Value in Mn $)

Source: ITC, Geneva

2007 2011CountryChina 24181.7 39374.2Italy 9712.94 10376.2Hong Kong 5639.64 5317.32Germany 2999.19 4659.42Belgium 3375.63 4155.85Indonesia 1567.05 3227.01Netherlands 1811.96 3225.1Spain 2440.47 2823.39

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France 1840.51 2420.04Portugal 1695.88 2088.41UK 1055.99 1469.57Romania 1394.32 1393.71

ChinaItal

y

Hong Kong

Germany

Belgium

Indonesia

Netherl

ands

SpainFra

nce

Portugal UK

Romania

0%10%20%30%40%50%60%70%80%90%

100%

Major exporting countries of Footwear

20112007

Footwear – Global Scenario and India’s share

The global import of Footwear (both leather footwear as well as non-leather footwear)

has increased from US$ 81.47 billion in 2007 to US$ 103.38 billion in 2011, growing at a

CAGR of 6.13%. During 2011, the India’s share in the global import is 1.92%.

(In Million US$)

2007 2008 2009 2010 2011

Global import of Footwear 81477.88 88822.80 78453.08 91614.94 103385.2

4

India's export of Footwear 

& Uppers

1489.35 1534.32 1507.59 1758.67 2079.14

% Share of India 1.82% 1.72% 1.92% 1.91% 2.01%

58 | P a g e

Source: ITC, Geneva & DGCI &S, Kolkata

For comparison purpose, Global Footwear import includes leather & non-leather

footwear.  India’s Footwear includes – Leather, non-leather and leather uppers

Footwear is the engine of growth of the leather industry in India. India’s export of

Footwear touched US$ 2055.93 million in 2012-13, accounting for a share of 41.14% in

India’s total export from the leather sector of US$ 4996.91 mn.  

India’s Footwear export (leather, uppers & non-leather) is growing at a CAGR of 7.59%

in the last five years ending 2012-13

India’s export of leather footwear had increased from US$ 1174.03 million in 2007-08

to US$ 1684.22 million in 2012-13.

India’s export of footwear components had declined from US$ 269.30 million in 2007-

08 to US$ 245.04 million in 2012-13

India’s export of non-leather footwear has increased from US$ 46.02 million in 2007-

08 to US$ 126.67 million in 2012-13

India’s Footwear Export Growth over the last Four Decades 

Export of footwear from India increased manifold over the last four decades. During

2012-13, India’s footwear export is valued at US$ 2055.93, constituting 41.14% share in

total export of leather & leather products.

59 | P a g e

Footwear exports has increased from US$ 102.37 million in 1982-83 to US$ 2055.93

million in 2012-13

Major Markets:

The major markets for Indian Footwear are UK with a share of 19.06%, Germany

13.36%, USA 11.06%, Italy 7.96%, France 7.61%, Spain 4.93%, Netherlands 4.47%,

UAE 3.67% and Denmark 1.60%. Nearly 82% of India’s export of footwear goes to

European Countries and the USA with exports touching US$ 1456 mn to EU and US$

227.37 mn to the USA. Future growth of Indian footwear in India will continue to be

market driven. The European countries and the US are major consumers for the Indian

footwear.

A Statement showing India’s Export of Footwear (leather, non-leather and leather

shoe uppers) to different countries:

(Value in Million $)

Country 2005-

06

2006-

07

2007-08 2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

% Share

Germany 170.97 217.23 246.84 229.65 224.3 286.7 353.71 274.63 13.36%

UK 195.78 208.2 241.37 247.06 296.45 339.65 360.52 391.95 19.06%

Italy 134.35 186.11 229.81 221.09 210 219.72 219.61 163.66 7.96%

USA 131.07 127.15 136.92 163.03 123.6 143.02 183.02 227.37 11.06%

France 74.48 99.81 116.03 119.2 144.56 154.95 159.49 156.53 7.61%

Spain 63.7 64.57 76.69 91.86 95.94 112.05 113.85 101.40 4.93%

Netherlands 32.96 48.57 72.91 76.2 65.13 6.19 101.72 91.82 4.47%

Portugal 22.15 35.03 37.34 28.21 22.63 25.69 28.76 21.40 1.04%

UAE 25.78 34.64 39.23 39.4 39.45 41.82 62.14 75.46 3.67%

Denmark 18.37 14.65 17.48 14.78 17.01 16.55 24.30 32.88 1.60%

Australia 11.58 10.11 12.52 13.34 15.5 12.82 15.59 22.41 1.09%

Sweden 6.77 7.99 12.04 12.64 12.2 12.07 14.08 11.98 0.58%

60 | P a g e

Canada 11.95 10.91 10.41 8.96 9.3 10.56 15.00 14.86 0.72%

SouthAfrica 8.26 12.11 8.52 8.49 9.87 11.33 14.75 13.49 0.66%

Japan 3.17 3.07 4.63 8.23 5.45 7.51 14.63 18.85 0.92%

Others 133.9 156.76 226.61 252.18 216.2 358.04 397.97 437.24 21.27%

Total 1045.24 1236.91 1489.35 1534.32 1507.59 1758.67 2079.14 2055.93 100.00%

Source: DGCI& S

Germany UK

Italy USAFra

nce Spain

Netherla

ndsPortugal UAE

DenmarkAustra

liaSweden

Canada

SouthAfrica Jap

anOthers Total

0%10%20%30%40%50%60%70%80%90%

100%

India's Footwear Export

2012-132011-122010-112009-102008-092007-082006-072005-06

Future Trends: - Keeping in view its past performance, current trends in global trade,

the industry’s inherent strengths and growth prospects, the footwear industry aims to

augment production, thereby enhancing its exports from the current level of US$ 2.07

billion.

Indian footwear industry poised for growth

India has state-of-the-art manufacturing plants.  The footwear sector has matured from the

level of the manual footwear manufacturing method to the automated footwear 61 | P a g e

manufacturing systems. Footwear production units are installed with world class

machines.  Manned by skilled technicians, these machines help to turn any new

innovative idea into reality. Support systems created for the sector have indeed served the

footwear industry well. India has a well developed footwear component manufacturing

industry.  The future growth of the footwear industry in India will continue to be market-

driven, and oriented towards EU and US markets.  With technology and quality of the

footwear improving year after year, Indian Footwear industry is stamping its class and

expertise in the global footwear trade. 

5.2.3 LEATHER GARMENTS

Global Scenario:

The global imports of leather garments had marginally declined from US$ 3986.73 mn in

2007 to US$ 3910.97 mn in 2011. A Statement showing global import of leather garments

viz-a-vis India’s export and share during 2007 to 2011 is given below:

(Value in Million US$)

2007 2008 2009 2010 2011

WORLD IMPORT 3986.73 4144.04 3376.02 3601.72 3910.97

INDIA'S EXPORT 345.34 426.17 428.62 425.04 572.45

% SHARE OF INDIA 8.66% 10.28% 12.69% 11.80% 14.64%

62 | P a g e

2007 2008 2009 2010 20110

500

1000

1500

2000

2500

3000

3500

4000

45003986.73 4144.04

3376.023601.72

3910.97

345.34 426.17 428.62 425.04 572.45

World import vs India's Export in Leather Garments

WORLD IMPORTINDIA'S EXPORT

Major importing countries of Leather Garments:

Country 2007 2008 2009 2010 2011Germany 469.61 523.19 449.97 471.1 561.21USA 853.04 641.87 437.24 483.63 485.17France 285.68 361.49 326.33 349.01 368.62

Italy 271.84 293.31 230.62 242.23 278.73

UK 226.95 224.2 184.6 179.54 195.92Spain 225.25 238.11 205.87 178.9 191.36

Hong Kong 143.27 140.55 113.61 140.54 185.25

Netherlands 143.32 159.09 132.57 143.91 161.62

Japan 185.27 177.75 166.32 180.15 138.75Russia 58 76.15 63.4 118.41 129.09Switzerland 124.69 141.79 118.58 110.55 127.87China 31.04 46.31 42.39 66.93 127.53Austria 87.69 91.25 84.8 92.55 115.86

Source: ITC, Geneva

63 | P a g e

German

yUSA

France Ita

ly UKSp

ain

Hong Kong

Netherl

ands

Japan

Russia

Switz

erlan

dChina

Austria

0

500

1000

1500

2000

2500

3000

Major Leather garments importing countries

20112010200920082007

These 13 countries together accounts for a share of 78.41% in global leather

garments import

Major Exporting countries of Leather Garments

(Value in Mn$)

Country 2007 2008 2009 2010 2011

Italy 598.63 637.79 466.96 565.64 725.09

China 1307.77 1008.22 792.75 870.65 689.74

Pakistan 451.27 475.27 350.78 367.95 373.72

Germany 271.29 309.11 259.75 248.76 300.51

France 156.62 179.62 162.54 171.52 204.06

Hong Kong 185.14 175.85 151.87 156.90 186.34

Turkey 232.39 256.11 192.95 181.70 181.26

USA 226.90 216.36 170.38 153.77 154.77

Spain 88.25 114.20 122.94 95.49 118.01

Netherlands 73.03 85.94 78.04 81.97 110.92

Source: ITC, Geneva64 | P a g e

Italy China Pakistan Germany FranceHong KongTurkey USA Spain Netherlands0

200

400

600

800

1000

1200

1400

Major exporting countries of Leather garments

20072008200920102011

Indian Scenario:

Leather garments form a significant segment of the Leather Industry in India. Leather

garments production capacity is estimated to be 16 million pieces annually. India

produces different types of leather garments i.e., jackets, long coats, waist coats/shirts,

pant/shorts, motorbike jackets, industrial leather garments, leather aprons etc.

India is the second largest producer of leather garments, next only to China, which

produces 70 million pieces of the total global trade volume of about 120 million pieces. 

It is a matter of great pride that Indian leather garments have been making giant strides in

the world of fashion. National Institute of Fashion Technology and National Institute of

Design lends design support to make continuous fashion statements. These Institutes

provides well trained personnel and imaginative designers. India’s acknowledged strength

is leather tanning and its ability to produce a wide variety of fashion leathers.

India’s Export of Leather Garments

(Value in Million US$)

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

65 | P a g e

345.34 426.17 428.62 425.04 572.45 563.48

Source: DGCI& S

345.34

426.17

428.62425.04

572.45

563.48

India's Export of Leather Garments

2007-082008-092009-102010-112011-122012-13

India’s export of Leather Garments increased from US$ 345.34 mn in 2007-08 to US$

563.48 million in 2012-13, growing at a CAGR of 10.28%

India’s export of leather garments accounts for a share of 11.28% in India’s total

leather trade of US$ 4996.91 million in 2012-13.

India’s position as the third largest global supplier of leather garments is only going to

strengthen given the availability of quality raw material coupled with skilled

craftsmanship. 

Major brands like ARMANI, ZEGNA, ABERCROMBIE & FITCH, MARCO POLO,

MANGO, COLEHAAN, ANDREW MAARC, GUESS source Leather Garments from

India

India’s Export of Leather Garments – Major markets 

The major markets for Indian Leather Garments are Germany with a share of 23.18%,

France 13.55%, Spain 11.88%, Italy 10.99%, USA 7.49%, UK 6.16%, Netherlands

3.80%, Denmark 3.47% and Canada 2.31%.

 (Value in Million US$) 

66 | P a g e

Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Germany 69.4 100.26 109.18 110.72 153.96 130.63USA 27.76 22.2 17.04 21.96 31.92 42.19UK 23.23 27.92 25.07 21.84 30.43 34.69

Italy 58.64 70.13 64.96 59.59 71.41 61.92

France 27.1 42.28 55.53 60.94 69.38 76.34Spain 47.69 48.47 51.08 46.4 66.32 66.94

Netherlands 11.25 15.72 16.87 17.39 23.02 21.41

Australia 1.91 3.6 5.64 4.84 6.61 5.7

Denmark 12.35 23.86 19.74 19.09 18.82 19.55Canada 8.94 7.86 8.64 6.96 10.51 13.02

Switzerland 2.41 3.92 4.08 3.33 5.1 4.57

Sweden 8.62 7.96 6.46 6.76 6.79 8.05Austria 2.55 4.3 4.63 4.06 4.82 4.48Belgium 5.13 7.45 8.46 8.52 9.42 7.96Portugal 3.93 4.19 3.64 2.67 2.51 2.37UAE 5.33 4.13 4.33 4.08 3.9 2.82China 0.09 0.05 0.26 2.67 12.47 8.29

  (Source: DGCI& S)

Germany USA UK

ItalyFra

nceSpain

Netherla

nds

Australia

DenmarkCanada

Switzerlan

dSweden

Austria

Belgium

Portugal UAE

China

0%10%20%30%40%50%60%70%80%90%

100%

India's Leather garments Export to Major countries

2012-132011-122010-112009-102008-092007-08

REGION-WISE EXPORT OF LEATHER GARMENTS

67 | P a g e

(Value in Million US$)

Details 2007-08 2008-09 2009-10 2010-11 2011-12

India’s Export 345.34 426.17 428.62 425.04 572.54

Export from

Southern Region

121.55 133.72 132.90 156.50 174.72

% Share of

Southern Region

35.19% 31.37% 31.00% 36.82% 30.51%

Source: DGCI& S

Quantity-wise Export of Leather Garments:

(In Pcs)

2011-12Children Garments 87,281

Leather Jackets (Gents) 32,24,005

Leather Long Coats (Gents) 32,519

Leather Pant/Shorts (Gents) 4,86,283

Leather Waist Coats/Shirts (Gents) 70,772

Leather Jackets (Ladies) 27,93,094

Leather Long Coats (Ladies) 67,209

Leather Pant/Shorts (Ladies) 3,92,296

Leather Waist Coats/Shirts (Ladies) 1,15,769

Other (Leather Garments) 18,12,247

68 | P a g e

Leather aprons 4,09,006

Industrial Leather Garments 3,49,336

Motorbike Jackets 3,218Total 98,43,035

87,281

3,224,005 32,519486,28370,772

2,793,094

67,209392,296

115,7691,812,247

409,006349,3363,218

9,843,035

Quality wise Export of Leather garmentsChildren GarmentsLeather Jackets (Gents)Leather Long Coats (Gents)Leather Pant/Shorts (Gents)Leather Waist Coats/Shirts (Gents)Leather Jackets (Ladies)Leather Long Coats (Ladies)Leather Pant/Shorts (Ladies)Leather Waist Coats/Shirts (Ladies)Other (Leather Garments)Leather apronsIndustrial Leather GarmentsMotorbike JacketsTotal

Region-wise Export of Leather Garments:

(In pcs)

Region 2011-12

(Qty In

Pcs)

Value in

Mn Rs.

% share

value-wise

South 1,965,914 8372.60 31.09%

Central 1,397,049 323.90 1.20%

West 125,585 495.20 1.84%

69 | P a g e

East 1,595,893 584.50 2.17%

North 4,758,594 17151.00 63.69%

Total 9,843,035 26927.10 100%

CLE Membership Records

5.2.4 LEATHER GOODS & ACCESSORIES & GLOVES:

Global Scenario:

The global imports of leather goods & accs had increased from US$ 16388.49 mn in 2007

to US$ 22216.93 mn in 2011, growing at a cumulative annual growth rate of 7.90%. A

Statement showing global import of leather goods & accs viz-a-vis India’s export and

share during 2007 to 2011 is given below:

(Value in Million US$)

Leather Goods & Accs 2007 2008 2009 2010 2011

WORLD IMPORT 16388.49 18117.82 14376.65 17059.43 22216.93

INDIA'S EXPORT 800.46 873.44 757.02 855.78 1089.71

% SHARE OF INDIA 4.88% 4.82% 5.26% 5.01% 4.90%

70 | P a g e

2007 2008 2009 2010 20110

5000

10000

15000

20000

25000

Leather goods and accessories

INDIA'S EXPORTWORLD IMPORT

Major Importing Countries of Leather Goods & Accs:

(Value in Million US$)

Country 2007 2011

USA 3442.41 3862.78

Hong Kong 1748.82 2934.81

Japan 1764.83 2016.83

France 1105.43 1558.11

Germany 855.10 1223.17

Italy 893.25 1112.29

UK 949.24 1055.44

China 234.65 863.67

Korea Rep 302.43 757.56

Singapore 276.47 604.38

Macao 44.71 473.66

Spain 377.22 437.38

71 | P a g e

Switzerland 379.03 417.09

USA

Hong Kong

Japan

France

German

yIta

ly UKChina

Korea Rep

Singap

oreMaca

oSp

ain

Switze

rland

0

500

1000

1500

2000

2500

3000

3500

4000

Major importing countries of Leather goods & accessories

20072011

These 13 countries together accounts for a share of 77.95% in global leather goods

& accs. import.

Top Exporting countries of Leather Goods & Accs

(Value in Mn$)

Country 2007 2011

China 3407.65 4693.80

Italy 3358.86 4331.55

France 2585.48 3405.22

Hong Kong 2033.47 3348.99

Germany 500.41 701.76

USA 348.70 408.82

Singapore 121.89 401.23

UK 257.05 335.39

Netherlands 152.88 326.22

Switzerland 290.59 321.73

72 | P a g e

China Italy

France

Hong Kong

Germany USA

Singap

ore UK

Netherla

nds

Switzerlan

d

0100020003000400050006000700080009000

Top exporting countries of Leather goods & accessories

20112007

Leather Gloves:

The global imports of Leather Gloves had increased from US$ 2090.04 mn in 2007 to

US$ 2290.18 mn in 2011, growing at a CAGR of 2.31%. A Statement showing global

import of Leather Gloves viz-a-vis India’s export and share during 2007 to 2011 is given

below

(Value in Million US$)

2007 2008 2009 2010 2011

WORLD IMPORT 2090.04 2434.23 1763.74 1960.58 2290.18

INDIA'S EXPORT 183.26 232.05 121.22 165.63 238.62

% SHARE OF INDIA 8.76% 9.53% 6.87% 8.44% 10.41%

73 | P a g e

Major importing Countries of Leather Gloves:

Country 2007 2011

USA 610.62 604.88

Germany 154.01 205.94

Japan 141.05 149.59

Canada 93.38 122.81

France 98.68 121.9

Hong Kong 165.66 110.92

UK 84.89 90.35

Italy 82.95 79.21

Sweden 52.6 75.48

Netherlands 40.2 59.23

Australia 41.11 52.09

Korea Rep 27.61 51.56

Belgium 46.74 45.3

These 13 countries together accounts for a share of 77.25% in global leather gloves

import.

Major Exporting Countries of Leather Gloves:

Country 2007 2011

China 840.74 1117.26

Pakistan 208.41 271.21Hong Kong 237.23 164.96

Indonesia 79.16 101.46

Italy 69.24 70.75

Germany 42.49 67.82

Thailand 48.03 52.63Netherlands 26.5 48.38

France 39.08 40.17

74 | P a g e

Indian Scenario

Leather Goods form an important segment of the leather industry in India. Leather goods

production capacity is estimated to be 63 million pieces annually.  

The different types of Leather Goods and accessories are manufactured in India i.e.,

Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, traveling

bags / luggage, Portfolio and similar such items, Hand Bags, shopping bags and similar

such items, Wallets, Purses, Pouches, Passport Holders, Credit Card Holders, Diary

covers and similar such items, Leather Belts, Caps etc. India also produces Leather

Upholstery – Sofa Seat Covers, Car Seat Covers etc.

Most of the units manufacturing leather goods are located in Kolkata, Chennai, Mumbai,

Ambur, Bangalore and Puducherry.  Industry is situated in few other clusters also. 

India is the fifth largest exporter of leather goods and accessories (inclusive of Gloves)

in the world.

Leather Goods and accessories manufactured in India bear brand names like Coach,

Pierre Cardin, Yves St Laurent, Etienne Aigner, Geoffery Beene, Harrods, Marks &

Spencer, Liz Caliborne, Guess, Next, Tommy Hilfiger, Kieffer, Waldhausen, Biemen,

Nederinum, Zaldi, Kallquists, Shires, GFS, Millers, Eisers, Weco, Ukal and Decalthon.

Leather Gloves:

Leather gloves of all categories like fancy/fashion gloves, sports gloves, industrial gloves

and other leather gloves is a thrust product among the items of small leather goods being

manufactured and exported from India. India is the fourth largest exporter of Leather

Gloves to the world. India produces about 52 million pairs of industrial gloves annually.  

India offers the world the largest technically trained manpower in leather craft at the most

competitive costs. Its association with respected product testing institutions such as

SATRA in the UK and PFI in Germany ensures the finest quality leather in the

manufacturing of gloves.

75 | P a g e

India’s Export of Leather Goods & Accessories including Gloves

(Value in Million US$)

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

800.46 873.44 757.02 855.78 1089.71 1178.96

Source: DGCI& S

India’s export of Leather Goods & Accessories including Gloves touched US$

1178.96 million in 2012-13, holding a share of 23.59% in India’s total export of US$

4996.91 mn 

 

India’s Export of Leather Gloves:

(Value in Million US$)

2007-08 2008-09 2009-10 2010-11 2011-12

183.26 232.05 121.22 165.63 238.62

Source: DGCI& S

183.26

232.05

121.22165.63

238.62

India's Export of Leather Gloves

2007-082008-092009-102010-112011-12

76 | P a g e

Major Markets

The major markets for Indian Leather Goods & Accessories are USA with a share of

19.12%, Germany 14.84%, UK 13.10%, France 5.69%, Italy 5.32%, Spain 5.77%,

Netherlands 4.57%, UAE 3.65%, Australia 3.08%, Denmark 2.85%,

India’s Export of Leather Goods & Accessories – Country-wise

 (Value in Million US$)

Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Germany 122.65 132.08 117.75 135.34 172.24 174.9

USA 123.86 155.02 137.97 162.9 196.83 225.47UK 133.92 125.77 123.08 131.74 137.14 154.39Italy 56.96 67.51 44.82 46.57 67.02 62.67France 36.07 45.04 38.9 48.16 59.09 67.05

Hong Kong 3.37 4.22 5.77 8.71 11.49 9.77

Spain 59.93 52.33 51.47 62.82 79.12 67.98Russia 1.02 1.01 0.57 0.97 2.45 2.74

Netherlands 36.51 41.91 38.12 40.86 49.39 53.9

Australia 28.48 32.72 26 26.27 34.17 36.3

New Zealand 2.25 2.02 1.56 2.35 3.34 3.32

Denmark 15.2 17.02 16.16 18.91 27.82 33.65

Belgium 13.94 14.88 12.34 14.83 18.94 17.51UAE 26.16 34.97 21.63 21.76 35.1 43.05

Source: DGCI& S

77 | P a g e

Germany

USA UKItal

y

France

Hong Kong

SpainRussia

Netherla

nds

Australia

New Ze

aland

Denmark

Belgium UAE

0%10%20%30%40%50%60%70%80%90%

100%

India's export of Leather goods and accessories

2012-132011-122010-112009-102008-092007-08

Quantity-wise Export of Leather Goods:

(In Pcs)

2011-12Ladies Handbags and other bags 1,43,82,032Wallets 5,37,99,908Leather Belts, Caps & Ties 99,10,639Purses 69,04,629Pouches 26,37,311Passport holders / Credit card holders etc 38,71,699

Travel / Luggage ware 6,39,908Handcrafted leather items 23,42,290Sofa / Chair/ Car seat covers (upholstery) 1,07,678

Diary Covers / Cheque Book Covers 12,66,241Pet Accessories 7,60,102Portfolio / Briefcases 2,04,901Desktop materials 4,34,451Covers for Camera, Calculator etc 2,91,274Leather Toys 78,754Other Leather Goods 4,09,99,396Total 13,86,31,213

78 | P a g e

CLE Membership Records

5%

19%

4%2%

1%1%0%

1%

0%0

%0%

0%

0%0

%0%

15%

50%

Quantity wise export of Leather Goods

Ladies Handbags and other bags WalletsLeather Belts, Caps & Ties PursesPouches Passport holders / Credit card

holders etcTravel / Luggage ware Handcrafted leather itemsSofa / Chair/ Car seat covers (upholstery)

Diary Covers / Cheque Book Covers

Pet Accessories Portfolio / BriefcasesDesktop materials Covers for Camera, Calculator etcLeather Toys Other Leather GoodsTotal

79 | P a g e

Quantity-wise Export of Leather Gloves:

(In Pcs)

2011-12

Industrial Gloves 108,706,249

Fancy / Fashion Gloves 1,704,898

Sports Gloves 150,139

Other Leather Gloves 839,703

Total 111,400,989

CLE Membership Records

Region-wise Export of Leather Goods: 

(In pcs)

2011-12

Central 17,866,725

East 60,591,235

North 31,189,464

South 25,713,413

West 3,270,376

Total 138,631,213

CLE Membership Records

Region-wise Export of Leather Gloves:

(In prs)

REGION 2011-12East 10,81,35,469North 1,06,421South 31,51,599West 7,500Total 11,14,00,989

CLE Membership Records

80 | P a g e

With the availability of quality raw materials coupled with skilled craftsmanship, India is

now poised to make itself a major destination for global sourcing of leather goods and

accessories. State-of-the-art production units and in-house Design Studios will strengthen

the industry in producing products with exquisite design and quality.

The industry’s accelerated development and growth is being aided by the ambitious

capacity expansion & modernization plans of private industry and the Indian

Government’s encouraging policy measures.

5.2.5 SADDLERY & HARNESS

Global Scenario:

The global imports of saddlery & harness had increased from US$ 1100.50 mn in 2007 to

US$ 1224.85 mn in 2011, growing at a CAGR of 2.71%.  A Statement showing global

import of saddlery & harness viz-a-vis India’s export and share during 2007 to 2011 is

given below

(Value in Million US$)

2007 2008 2009 2010 2011

WORLD IMPORT 1100.50 1141.57 990.99 1096.16 1224.85

INDIA'S EXPORT 106.18 92.15 83.39 87.92 107.54

% SHARE OF INDIA 9.65% 8.07% 8.41% 8.02% 8.78%

81 | P a g e

2007 2008 2009 2010 20110

200

400

600

800

1000

1200

1400

1100.5 1141.57

990.991096.16

1224.85

106.18 92.15 83.39 87.92 107.54

World import vs India's export of Saddlery & Harness

WORLD IMPORTINDIA'S EXPORT

Major importing countries of Saddlery & Harness:

(Value in Million US$)

Country 2007 2011

USA 375.22 380.98Germany 102.77 131.65France 75.64 75.51UK 77.86 75.14Japan 43.9 58.57

Canada 46.95 55.98

Netherlands 28.94 45.58

Australia 30.39 38.29

Italy 34.85 37.49

Belgium 25.45 33.98

Sweden 38.6 31.69

Spain 24.84 26.39Switzerland 22.74 26.24

These 13 countries together accounts for a share of 83.07% in global saddlery &

harness import.

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Top Exporting countries of Saddlery & Harness

(Value in Mn$)

Country 2007 2011China 231.63 353.45Germany 131.05 147.14USA 51.09 55.47France 42.55 49.46Italy 43.51 49.38UK 49.57 44.1Taiwan 35.63 41.78

Netherlands 14.16 31.58

Ireland 22.87 29.15

Hong Kong 25.24 28.41

Indian Scenario:

Harness & Saddlery goods are being manufactured in Ambur for more than last 100

years. The Saddlery manufacturing started in the 19th century at the British Indian

Corporation in its Copper Alan branch in Ambur and simultaneously the British

Government started the Ordinance Equipment Factory at Ambur to cater to the needs of

the Army. The craft of making saddlery was imparted to the local artisans by the master

saddlers brought from the UK, whose generations now formed the workforce of the

present industry. 

By virtue of Ambur’s specialization in vegetable tanned buffalo hides, and due to the

presence of trained manpower, this has become the most important centre for

manufacture of saddlery goods in India.  In fact, Ambur is the only centre in India which

produces the harness & saddlery goods. Almost all the units operating in Ambur are

100% export-oriented. 

Indian Saddlery and Harness industry is now becoming globally competitive and brand

dominated, awash with designs. India is positioned as the third largest exporter of

Saddlery & Harness to the world, accounting for a share of 8.04% in the global saddlery

import of US$ 1093.82 million.

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Indian Saddlery and Harness products are gaining an ever-increasing recognition in the

highly competitive global saddlery & harness leather arena. Estimated production

capacity of the Saddlery & Harness industry in India is 12.50 million pieces per annum.

Technology, work craftsmanship, product quality are the hallmarks of the Indian Saddlery

& Harness industry. 

The major production clusters for Saddlery & Harness are Ambur, Delhi etc

The different categories of Saddlery & Harness exported from India are Saddles / Bridles,

Harness and Other Saddlery items

A Statement showing India’s export of Saddlery & Harness

(Value in Million US$)

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

82.33 106.18 92.15 83.39 87.92 107.54 108.32

Source: DGCI& S

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

0 20 40 60 80 100 120

82.33

106.18

92.15

83.39

87.92

107.54

108.32

India's Saddlery & Harness Export

India

During 2012-13, India’s export of Saddlery & Harness touched US$ 108.32 million,

accounting for a share of 2.17% in India’s total export from leather sector (US$

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4996.91mn). 

Major Markets:

The major markets of Indian Saddlery & Harness are Germany with a share of 20.22%,

USA 15.28%, UK 11.55%, France 8.12%, Australia 7.04%, Netherlands 6.39%, Sweden

6.11%, Belgium 4.72%, Canada 3.31%, Denmark 2.82%, Spain 2.27%, Italy 2.71%.

(Value in Million US$)

Countries 2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

Germany 19.87 19.67 18.02 18.45 22.18 21.9

USA 13.47 11.31 10.06 11.38 13.77 16.55UK 16.25 9.08 9.31 8.64 11.15 12.51Italy 4.91 3.43 3.62 3.73 4.01 2.93France 9.22 8.54 7.58 6.31 6.16 8.8Spain 3.54 3.07 1.88 2.4 2.34 2.46

Netherlands 5.64 6.12 5.42 5.65 6.48 6.92

Australia 5.3 4.48 5.37 5.88 9.12 7.62

Denmark 3.27 3.13 2.51 2.95 3.09 3.06

Canada 2.08 2.45 2.31 2.55 2.97 3.58

Sweden 6.37 5.93 5 5.65 5.98 6.62Belgium 4.51 4.67 4.15 6.15 9.15 5.12Finland 1.94 1.91 1.03 1.25 1.63 1.15New Zealand 1.5 1.05 1.23 1.12 1.34 1.45

Source: DGCI& S

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German

yUSA UK

Italy

France

Spain

Netherl

ands

Australia

Denmark

Canada

Sweden

Belgium

Finlan

d

New Ze

aland

0

5

10

15

20

25

Major market of india's Saddlery & Harness 

2007-082008-092009-102010-112011-122012-13

Quantity-wise export of Harness & Saddlery

(In pcs)

Category 2011-12

Non-Leather

Harness/saddlers/bridles

10,996,324

Saddlers / Bridles 2,941,884

Harness 4,459,858

Total 18,398,066

Source: CLE Membership Records

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10,996,324

2,941,884

4,459,858

18,398,066

Quantity wise export of Sadlery & Harness

Non-Leather Harness/saddlers/bridlesSaddlers / BridlesHarnessTotal

Region-wise export of Harness & Saddlery

(In pcs)

REGION 2011-12

Central 1,81,81,665

North 2,16,401

Total 1,83,98,066

Source: CLE Membership Records

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CHAPTER-6

CONCLUSION & RECOMMENDATIONS

Even though the Indian environmental regulations for the leather tanning industry

are equally stringent as the international regulations, the pollution load coming from the

Leather industries is still heavy, and it is a problem both for the people living nearby,

and for the river and ground water. There is a wide gap between the environmental

regulations for the leather tanning industry and the environmental performance among

the Leather industries in the Ambur area. Though few Leather industries have the

prescribed equipment to do primary treatment but most still fail to operate them properly

or at all. Many of the Leather industry people believe their activity is not harmful to the

environment, or they do not see the environment as something that needs to be protected

or treated properly. Much of the reason for this is the problem of corruption and the

bribery that the PCB officers demand. The poor financial position and the small size of

many Leather industries are also important factors. Even though the cost of doing

primary treatment is very low in India, the organization of the payment for secondary

treatment has led to a lot of confusion, mal-information and mistrust between the

Leather industry people and the state bureaucracy administrating the CETP in Ambur.

Many Leather industry people have failed to contribute their share of the cost. Also the

fact that most of the Leather industries in India are supplying the world market with low

quality products or intermediaries, limits the opportunities to benefit from technological

upgrading towards cleaner technology. Finally, “demanding customers” are too far away

to be able to influence the environmental performance of the Leather industries. All

these factors contribute to explain the Leather industry people’ environmental

performance. Finally, it is important to acknowledge that the opportunities for

technological upgrading that could trigger a better use of resources and hence reduce the

production of waste, are few and costly. Implementing costly technology or even

cleaning mechanisms is a problem particularly for the many small Leather industries

(around 80% of the total number) that are in a poor financial position.

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BIBILIOGRAPHY1. www.leatherbiz.com

2. www.leathernet.com

3. www.dgciskol.nic.in

4. www.leatherindia.org

5. www.amburnet.com

6. www.iupindia.in

7. www.econbiz.de

8. www.statisticbrain.com

9. Jiwitesh Kumar Singh, International Trade And Business (2002) , Deep &

Deep Publications pvt ltd., Chapter 1 and 5.

10. D C Kapoor, Export Management (2003), Vikas Publishing house pvt ltd,.

11. Subas C. Kumar, Indian Leather Industry growth, productivity and export

performance (1997),. APH publishing corporation.

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QUESTIONNAIRE

1. Is It A Friendly Environment?

YES NO

2. Do You Think The Manufacturing Industry Is Still Playing A Major Role In The Growth Of

Indian Economy?

YES NO

3. Does The Company Follow The Pollution Control Norms?

YES NO

4. From Where Your Major Source Of Work Force Comes?

Ambur Outside

5. Is The Income Sufficient To Handle The Cost Of Living In Ambur?

YES NO

6. Is The Demand For Products Increasing In The Recent Past?

YES NO

7. What Is Your Major Source Of Income? (Export/Local)

Export Local

8. What Is The Employee Retention Rate In Your Company?

20 40 60 80 100

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9. Does The Government Subsidies Favour The Business?

YES NO

10. Do You Have The Support Of Local People?

YES NO

11. Do You Face Any Problems Because Of The Contaminated Ground Water?

YES NO

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