Leather exports up 15%, to touch $5.75 bn this fiscal

Leather exports from India is expected to touch $5.75 during the current fiscal, though it is an increase of around 15% it is the original target which set by the industry. Exporters from this industry, which is among the top 10 foreign exchange earners, said they are now looking at new markets including Africa and South America as part of de-risking strategy.

M Rafeeque Ahmed, president, All India Skin and Hide Tanners and Merchants Association said that export of leather and leather products exports are expected to touch around $5.75 billion during the current fiscal, although the target is $6 billion.

Earlier, in his presidential address at the 96th Annual General Body Meeting of Association, Ahmed said that leather exports in 2012-13 rose by around 3% to touch around $5 billion, while originally it was expected to touch by $5.4 billion.

“Though I am not happy at the shortfall, I feel despite the turbulence in the global finance, we have done reasonably well on the export front,” he said.

Exports to the traditional markets like Germany, Italy, Spain and Russia have recorded more than 10% decline. However USA and Denmark have reported an increase of around 20% with UK coming next with 10%.

Ahmed said, the industry would look at East and African and South American countries for a huge push in exports as those countries have great potential. He added, domestic market is also encouraging and entrepreneurs are paying more attention the domestic market.

Speaking about the Rupee depreciation, during June to August 2013, the currency depreciated from a value of Rs 50 plus to an extent of Rs 68 against the US Dollar and Rs 100 against the British Pound. These are the industry's main markets. The depreciation may have benefited a few exporters for a short period but it is an ominous sign.

He further said, raw material shortage is a nagging problem facing the industry as large quantities of semi-finished leather are being exported to China and Italy. The recent decision of the Government of India accepting the views for Leather Exports (CLE), making certification by Central Leather Research Institute (CLRI) mandatory for leather exports so as to conform to the regulatory policies of the Government will prevent clandestine exports and Ahmed hoped that as a result make more raw hides and skins available for tanneries.

While stressing about revisit strategies with countries where Free Trade Agreement (FTA)/ Comprehensive Economic Partnership (CEPA) have been signed, Ahmed said, the idea of FTA is to boost exports by taking advantage of tariff concessions. Exports to countries with which India has trade pacts have naturally declined as seen from the India Exports to Association of Southeast Asian Nations which went down to $14.66 billion in the first six months of 2012-13, compared with $36.74 billion in the same period in 2011-12.

He suggested that such countries in the region should be put under the Focus Market Scheme to dovetail exports, conscious attempts should also be made by exporters to avail of the tax concession benefits and step up exports substantially.