Indore leather exporters face meltdown heat

Exports of specialised leather decorative items have been severely hit by the economic slowdown in the US.

Leather workers migrated here 25 years ago from Rajasthan and settled in Pardesipura, a small locality in Indore.

They made the town famous with their cottage products and reported export turnover of around Rs 15 crore.

United States was the largest market of Indore made artifacts.

Artisans and craftsmen in Indore made toy-size to life-size animals from hide brought in from Hyderabad for sale as life-style accessories with unusual appeal.

The artisans used goat or sheep leather and processed it with various tree barks and other herbs to make what is called vegetable tanned leather.

The process did not machines as each artifact was designed, conceived and created manually. Leather replicas of bears, panthers, camels, cheetahs, crocodiles, deer, elephants, lions and tigers enjoyed good demand abroad. Besides the slowdown, they faced heavy taxation and sales tax problems.

Recently, the US imposed a ban on some exports, hitting exporters and artisans.

“Recently the US government banned rice-straw stuffed leather animals - we had to discover an alternative to rice straw but lost some consignments and had to dump them in the sea,” said Anand Choukse of Animal Figure, an export house of stuffed leather animals. “It was a good business 10 years ago. It has been revived to a considerable extent, but the slowdown has badly affected us,” Mushir Khan, an agent for the US market said.

“The US states have good demand for Indore made stuffed leather animals and toys. Now, the Indian government has yet to pave way for the exporters and artisans to find newer markets,” he added. State minister for rural industries Kailash Vijayvergiya was still upbeat on exports business and said there was hardly any impact of the slowdown on business. “I don’t see any dent in the exports of stuffed leather toys and animals due to slowdown but we are planning to create new avenues so that the exporters can have an exposure to the world market,” he said.

The state government had not granted any special status to the sector but has planned to provide exporters and artisans a sales platform through its showrooms “Mrignayani”. It aimed to encouraging them to participate in national and international gift-fairs, trade fairs and other shows.

A raw material bank or depot was planned for artisans making stuffed toys in small quantity for domestic markets.

“The Government of India, through development commissioner handicrafts, has extended us support and we will soon create a raw material bank at Polo Ground Indore with a financial assistance of Rs 2 crore. This will make leather and other stuffing raw material available for the sector at local level,” said M A Khan principal secretary state department of rural industries

“A recently organized reverse buyers seller meet at Indore saw $120,000 interest from France and Brazil traders. The state government is planning to create more facilities in association with Government of India for the exporters and artisans as it is dominated by cottage industry and needs much heed,” Khan added.

The business was now dependent on agents for retail and bulk buyers in the US market or some Gulf countries but this eroded margins. “We have to pay 10-15 per cent and in case if some rules imposed by US government takes effect we have to incur losses. A life-size stuffed horse fetches us from Rs 25000-50000 from any exporter in Indore while the real buyer in US may pay Rs 2-4 lakh for the same item,” alleged Choukse. Exporters said they feared new labour and environment laws, and new norms about specification of products, stuffing material, leather and other raw material used in making the toy or life-size animal or mount to hit exports.

“As of now agents rely upon exporters who declare and certify specifications about the products but if they have to grow in business, they will have to face more stringent norms of various other markets. The agents in Germany or other European countries may demand certifications and conduct third party inspections so that they can comply with norms of importing country. I don’t know how many of the Indore exporters will be able to comply with those norms”, said Mushir Khan.

Exporters wanted facilities like SEZ status, a design centre, common effluent treatment plant, proper availability of raw material, leather, water colour and export grade steel wires.

“We are facing shortage of labourers too - this sector should be given SEZ status to iron out problems which are small in nature,” Suber Rampurawala, president of the Indore Leather Exporters Association demanded.

Neither Centre nor state government had immediate plans on these lines. The governments should work out multi-point strategy to find designers, proper marketing agents and direct selling routes with buyers.