Micro, Small and Medium Enterprises Enhancing the Growth and Development of the Indian Leather Sector

By S. K. Basu
Director (Leather), Office of the Development Commissioner (MSME), New Delhi

New Delhi, July 27, 2011 (Washington Bangla Radio / PIB India) The Indian Leather Industry occupies a place of prominence in the Indian economy in view of its substantial export earnings, employment generation and growth.  This sector is known for its consistency in high export earnings and it is amongst the top ten foreign exchange earnings for the country. The 11th Plan expects the total turnover of the industry to grow from its current mark of about US$ 7 billion to US$ 13.2. billion  by 2011-12.

The impressive growth of the Indian Leather Sector over the past four decades from being a traditional rural and artisan based, inward-looking industry in the 1970s, to a modern, sophisticated, outward looking industrial sector in this decade. Pragmatic Government policies coupled with daring entrepreneurship displayed by the private sector placed the industry in the present status.

India has the largest livestock population in the world with 21 per cent. India has the largest livestock population in the world with 21% of world cattle and buffalo and 11% of world goat and sheep population. Added to this are the strength of skill manpower, innovative technology, increasing industry compliance to international environment standards and the dedicated support of the allied industries.

The leather industry is an employment intensive sector, providing job to about 2.5 million people, mostly from the weaker sections of the society.

Women employment is pre-dominant in leather products sector with about 30% share. Though India is the second largest producer of footwear and leather garments in the world, India accounts for a share of close to 3% in the global leather import trade of US$ 115.58 billion(2009).

Strength of Indian Leather Sector

    * Having own raw material source – 2 billion sq. ft. of finished leather produced annually.
    * Some varieties of goat/calf/sheep skin available in India are unique in quality.
    * Strong and eco-sustainable production base
    * Modernized manufacturing units
    * Trained/skilled manpower at competitive wage levels
    * World class institutional support for design and product development, HRD and Research & Development
    * Support of ancillary industries like leather chemicals and finishing auxiliaries as well as machineries
    * Presence in major markets throughout the world

As per a quick survey report of 4th All India Census of Micro, Small and Medium Enterprises(MSME) (2006-07) conducted by the Ministry of MSME, there are 26,741 registered Micro, Small and Medium Enterprises and 62,574 unregistered Micro, Small and Medium Enterprises in this sector in the country.

Leather Products Segment

·         Tanning sector – Annual Production 2 billion sq. ft. accounts for 10% of world leather requirement. Indian colours continuously being selected at the MODEUROPE Congress.

·         Footwear sector – Second largest footwear producer after China. Annual production 2065 million pairs. Around 1950 million pairs (95%) are sold in domestic market. Footwear export accounts for 44.32% share in India’s leather and leather products export. The footwear product mix are of gents 54%, ladies 37% and children 9%.

·         Leather garment sector – Second largest producer with annual production capacity of 16 million pieces. Fourth largest global exporter. Accounts for 12.60% share of India’s total leather and leather products export.

·         Leather Goods and Accessories Sector

·         Fifth largest global exporter. Annual production capacity - 63 million pieces of leather articles, 52 million pairs of industrial gloves and 12.50 million pieces of Harness & Saddlery items. Accounts for 24.68% share of India’s total leather and leather products export.

Major Clusters of Leather & Leather Products

The major leather and leather product clusters in India are Uttar Pradesh, Tamil Nadu, West Bengal, Maharashtra, Delhi, Haryana, Karnataka, Punjab and Rajasthan. Besides this, there are some minor clusters in the States of Andhra Pradesh, Assam, Madhya Pradesh  and Bihar.

·         Chennai Cluster – Chennai Cluster includes tanneries and product manufacturing units located at Pallavaran, Chromepet Vandalur and Madhavaram. The leather products manufactured in these clusters are finished leather, leather footwear, footwear components, leather garments, leather goods and leather gloves. Besides, there are clusters at Ambur, Vellore, Ranipet, Digul and Erode in Tamil Nadu.

·         Agra Cluster – Footwear is the main product manufactured in Agra Cluster. Agra footwear industry has approx. 5,000 units out of which approx. 60 units are fully mechanized, 150 units are semi-mechanized and remaining under the cottage and household category. Agra footwear industry has an installed capacity of producing approx. 2,50,000 – 3,00,000 pairs of footwear (all types) per day. Approximately 35% of the total population of Agra is dependent (directly or indirectly) on the shoe trade industry which provides employment to approximately six lakhs people.

·         Kanpur Cluster – Kanpur is a major centre in India for producing Harness and Saddlery goods and safety boots apart from finished leather. Jajmau area of Kanpur city is known as a major leather and leather product manufacturing and exporting cluster. The major leather products manufactured in this cluster are finished leather, leather footwear, footwear uppers, leather goods and Harness and Saddlery items.

·         Kolkata Cluster – Leather industry in West Bengal is mainly concentrated in and around Kolkata. The main strength of Kolkata cluster is leather goods which includes hand bags, wallets, purses, pouches, fashion gloves, industrial gloves, travel & luggage bags and all other small leather goods. Kolkata accounts for 60% of the total Exports in leather goods sector. Apart from leather goods, finished leather by chrome tanning process and chappals and sandles are also manufactured in a large quantity.

·         Mumbai Cluster – There are about three leather clusters in Maharashtra viz. Andheri (East), Kolhapur and Bhiwandi. Andheri (East) where most of the organized SSI units are scattered, are engaged in production of leather footwear, ladies sandles and leather goods. Kolhapur is famous for kolhapuri chappals.

·         Delhi Cluster - Over 50% of the country’s export of leather garments is produced in Delhi. Likewise over 55% India’s total production of non-leather footwear is manufactured in Delhi and the National Capital Region. Apart from this, leather footwear, leather accessories are also manufactured in this cluster.

Schemes implemented by Ministry of MSME for the benefit of Leather Sector

Technical consultancy and training programmes – Providing technical consultancy services and organizing product oriented entrepreneurship development programme in the field of leather and leather product sector at various places of the country through its field offices i.e. by MSME – DIs. Further, under the administrative control of Office of DC(MSME), there are two Central Footwear Training Institutes (CFTIs), Agra and Chennai functioning as autonomous institutions. Both the CFTIs are equipped with state-of-art machinery and equipments of footwear designing, manufacturing and teaching facilities. Both the institutes are organizing various long-term and short-term training programmes on footwear designing and manufacturing, out of which the two years diploma in ‘Footwear Design and Production’ is accredited with the International Textile Institute, U.K. Both the institutes also provide design development, pattern cutting & grading and common facility services to the footwear industry for getting their job done. The trainees passed out from these institutes are serving at various levels in the country or have started their own enterprises.

Cluster Development – Under the micro and small enterprises cluster development programme, 20 leather and leather product clusters have been identified for development.

Technology upgradation – Some of the components of National Manufacturing Competitiveness Programme (NMCP) like Design Clinic, Lean Manufacturing, Marketing Assistance etc. are relevant for the leather sector. Under the Credit Linked Capital Subsidy Scheme (CLCSS), the financial assistance by way of 15% capital subsidy (limited to Rs. Rs.15 lakhs) is provided to MSEs on inductions of well established and improved technology in leather and leather products sector. Presently, there are 196 machinery/equipments approved for getting subsidy assistance under CLCSS.

- PIB Features

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