Fewer imports by the US, Germany and other European nations are responsible.
Bengaluru: The leather exports industry of India has suffered a huge plunge because of the Covid-19 induced lockdown.
The leather exports industry saw a downfall of 34.15 percent. According to the Council for Leather Exports, India exported Rs. 278,056.32 million (US$ 3,984.13 million) worth of leather and leather products in 2019. But, in 2020 this number came down to Rs. 194,143.47 million (US$ 2,599.97 million).
“India’s export of leather, leather products, and footwear showed a decline in the last two years due to the recessionary trends in the global market,” said Mr. R. Selvam IAS, Executive Director, Council of Leather Exports.
The USA was the major importer of Indian leather and leather products in 2020. India exported 16.71 percent of leather and leather products to the US. But this export also saw a decrease of 35.91 percent compared to the previous year. The imports of leather products in the US went down by 9.51 percent. It gets most of its imports from China, Italy, and India.
“Leather was making a strong comeback during early 2020 due to increasing preference shown by the brands, as per feedback in the leather shows held during February 2020,” said Mr. R. Selvam. But, due to the pandemic and subsequent lockdown in March 2020, most shipments that were scheduled in the last week of March 2020 could not be affected thereby resulting in a 10.9 percent decline in exports during 2019-20. “As Europe and USA (which account for 70 percent of the export of leather, leather products and footwear) are still under the adverse impact of the pandemic, the exports during the current year have shown a declining trend,” he said.
“We were unable to produce due to lack of labour during the pandemic, so exports went down eventually,” said Mr. Harshpal Singh, a leather goods exporter from Gurugram. Mr Singh runs Amarpali Enterprises and is a producer, manufacturer, wholesaler and retailer of leather products. He said, “The absence of manpower because of the Covid-19 induced lockdown made it hard to produce leather goods.”
Mr. Madhavan, a Chennai-based Merchandiser for Rathnam Leathers, said that Covid-19 took a toll on the export market. The decrease in the past year happened because of the pandemic.
Mr. Singh said that even after unlock, the exports could not go up. “The companies were going through cash crunch too and could not pay the labourers so the cycle continued.” The companies didn’t pay the labourers, so the labourers did not produce. Exports could not pick up because of low production.
Mr. Singh is hopeful that the exports would come back to the pre-pandemic level by June 2021. “The production process is streamlining now, so the exports may soon come back,” he said.
“The government does not invest in the opening of new tanneries, so this affects the production of leather,” said Mr. Sairam, Marketing Consultant for Leather Companies in Jalandhar, Tamil Nadu, and Kolkata. He said that the policies of the government are more focused on promoting green initiatives in the country.
The production of leather in the tanneries affects the health of the workers. So, the tanneries are being shut down.
Mr. Suneel Kumar, Director of the Karnataka Institute of Leather Technology said that the pandemic has already affected the leather exports, but the recent Cow Slaughter Ban could also be a factor that is limiting the production of leather. He said that the industry might see the effects of this ban in the long run.
“The pandemic has increased India’s standing in the global market as a reliable supplier of high-quality goods and ‘Make in India’ is now preferred by the customers. Hence, there are good prospects for the growth of the leather, leather products and footwear industry in the country in future,” said Mr. R. Selvam.
Updated on March 14, 2020.