The lost charm of Indian leather products

Business Environment India

It may be good for the environment, but manufacturers say they are losing their income.

It started from a four percent fall, back in 2015, and has gone down to eight percent in 2021. There has been no relief said those involved in this business. The leather export business looks a lot different today.

“Back in 2012, I had a turnover of Rs. 12 crore, today, I have come down to just making Rs. 1 crore,” said Mohd Tahir, a leather exporter from Kanpur, Uttar Pradesh.

The exporter had no knowledge of Central Sector Scheme, Indian Footwear and Leather Department Programme(IFLDP). But he did apply for other schemes during COVID.

While expressing his disappointment, he said, “Whatever relief that we got during Covid, has now become a pain for us.” The government announced the Emergency Credit Line Guarantee Scheme (ECLGS) and within six months, they asked us to pay premium on the sanctioned amount, he added. “The government led us to a bigger debt instead of providing relief. The conclusion is that we are left with nothing. In today’s date, we are paying back interest on three accounts,” he said.

Under the ECLGS, the government announced 100 percent guaranteed coverage for additional working capital. Term loans, up to 20 percent of their entire outstanding credit that is, up to Rs. 5 crore, were to be sanctioned to business enterprises and micro, small and medium enterprises (MSMEs) .

Indian exports of leather products, such as apparel and clothing accessories have registered a significant fall since 2015, the data  from the Ministry of Commerce and Industry shows.

Decline had set in much before the pandemic, said Ravi Rajpal, chief executive of  ARS Exports from Kanpur. “But COVID made it worse, we had to shut down our operations completely. We still have no idea whether we will restart our business or not,” he added.

The fall in exports also affects the workers involved in manufacturing leather. Siri Gauri, a fashion enthusiast from Bengaluru, said that the decline in leather exports is a threat to the livelihood of people involved in it. “It is easy to say no to manufacturing of leather in the country. But what about those people who earn their daily meals from it?”

India accounts for about 13 percent of the global leather production. The sector provides jobs to around four million people, of which 30 percent are women.

Tahir’s loss is not just his but also that of the 37 workers he employed who lost their jobs. He currently operates with just three workers.

Factors behind fall

Big fashion majors like H&M are shifting their production to countries like Bangladesh, Sri Lanka, Vietnam, and Cambodia because of cheap labour. This could be one important reason behind the decline in the exports, explained Sreansh Gulechha, an international trade expert, Ghaziabad.

Apart from the the pandemic, there are several other factors such as increasing freight rates on exports, increasing cost of raw materials over the last two years, and other social issues such as change in the trend for leather products and ban on cow slaughter, he added.

“This sector is one area where we need to be ‘at manirbhar’. We still import 40 percent of leather. But at the same time leather is generally originated from animals. Our culture doesn’t necessarily promote animal slaughter. There has been a shift in people’s preference as they are becoming aware about the environmental impacts of manufacturing and using leather     ,” he added.

Government’s support 

Earlier this month, the Ministry of Commerce and Industry approved the continuation of the Central Sector Scheme “Indian Footwear and Leather Department Programme”(IFLDP).

An official from the Council of Leather Exports said that the applications for the scheme would be done through an online portal, which will be launched in a few weeks     .

Indian Footwear and Leather Development Programme (IFLDP) has been approved for continuation from 2021-22 to 2026, with an approved financial outlay of Rs. 1700 crore.

It aims at development of infrastructure for the leather sector, address environmental concerns specific to the leather sector, facilitate additional investments, employment generation and increase in production of leather.

Environmental impact of leather

Nitin, an animal rights activist, said that the four primary issues with leather manufacturing are animal abuse, excessive water consumption, water pollution and health hazards for the workers in the tannery industry.

Leather uses almost 20,000 liters of water for processing one tonne, Nitin said. Also, the waste water from tannery factories has heavy metals such as chromium, which makes water highly toxic, he added.

PETA states that leather has a huge impact on eutrophication, an ecological problem in which runoff waste leads to overgrowth of plants in water bodies. This suffocates animals by depleting oxygen levels in the water. It is also a cause of hypoxic zones, known as “dead zones.”

Vegan the next big, not yet

Vegan leather is mostly made of two plastic based materials, Polyvinyl Chloride (PVC)  and Polyurethane (PU). Vegan leather is usually thinner and lightweight than real leather.

The alternative branded vegan leather is like a luxury to some. On buying a vegan leather product, Siri said, “It’s something like only if I have the money, then why not!”

“If you look from the aspect of animal abuse, then vegan leather is definitely better. However, it still is not environmentally friendly,” Nitin said, co-founder, Bengaluru Brigade for Animal Liberation (BBAL)     .

While the industry is still new, Sreenash said that celebrities can influence the switch. People will eventually move away from leather and will opt other substitutes such as vegan leather, he added.

Also, the popularity of learning about leather in fashion schools is still prominent. Veegesh A G, assistant at Karnataka Institute of Leather and Fashion Technology said that their institutes has seen a constant rate of admissions every year.

Study by Infinium Global Research show that the market for global vegan leather is projected to grow at a compounded annual growth rate (CAGR) of 48.1 per during 2020-2026.