Nearly 13 months lockout of Kanpur leather tanneries has pulled down India’s finished leather exports by nearly 29 per cent during April-August 2019 compared to the corresponding period last financial year 2018-19.
While India exported finished leather worth $million 334.6 during Apr-Aug 2018, the offshore consignments fell by 29 per cent to $million 237.7 in the corresponding period in the current fiscal year. (See table). Other categories of leather also saw exports falling,
Kanpur accounts for almost 30 per cent of the country’s finished leather value chain and the order of the Yogi Adityanath government for complete shutdown of tanneries ahead of Kumbh Mela 2019 in downstream Prayagraj (Allahabad) to ensure clean water in river Ganga spelt a body blow to the leather industry.
Nearly 400 tanneries in Kanpur City were directed by the UP Pollution Control Board (UPPCB) for closure between December 15, 2018 and March 15, 2019. For compliance, the tanneries downed shutter nearly a month before the deadline of December 15 to ensure that no effluent was generated.
In fact, the slowdown in the domestic finished leather owing to the Kanpur tanneries lockout also pulled down its share from 14 per cent last year to less than 11 per cent in the composite Indian leather industry.
So far, about 40 Kanpur tanneries have already relocated to West Bengal owing to periodic disruption in Uttar Pradesh on issues of pollution and supply of raw leather after the Yogi Adityanath government clamped down upon illegal abattoirs.
Kanpur leather industry, including tanneries and leather goods manufacturers, estimated at Rs 12,000 crore, provides direct and indirect employment to a million people in Kanpur and Unnao districts. The cluster generates Rs 6,000 crore worth of exports to the Gulf, Europe, China, Iran etc.
On December 14, Prime Minister Narendra Modi had visited Kanpur to review the progress of the Centre’s flagship Namami Gange project and to personally see the purported improvement in the quality of water flowing in river Ganga.
Within days of Modi’s Kanpur visit, the UPPCB last week allowed 248 leather tanneries in the Jajmau area of Kanpur to reopen with the condition to operate at only 50 per cent of capacity. The green panel would assess the situation after two months and decide whether to extend the permission.
“We have received the order of the UPPCB for opening out units. However, it would take another 15-20 days when the tanneries can finally start operations, since there is a lot of maintenance work to be done,” Small Tanners’ Association member Nayyar Jamal told Business Standard today.
The shutdown of Kanpur based tanneries had also adversely affected raw leather prices in UP, which crashed by more than 60 per cent. The traders were in the meantime sending raw leather to places, such as Chennai, Jalandhar and Kolkata for processing, which was then procured by the city based manufacturing units for production of leather goods, he informed.
Earlier this year, the UPPCB had allowed 122 tanneries to reopen and operate at 50 per cent capacity after the conclusion of the Kumbh Mela 2019. However, they were later ordered to be shut citing the National Green Tribunal (NGT) guidelines pertaining to pollution.
While, the Kanpur tanneries are expected to come back to life after more than a year, yet industry players rue that it would be tough task to win the confidence of foreign buyers.
“The conditional reopening would not help us in getting export orders, since offshore buyers would be jittery at the prospective shutdown in future. The cause of the industry would be better served if the state government allows us to operate permanently, so that we can convince our buyers about the continuity of supply,” Council for Leather Exports (CLE) Central Region chairman Javed Iqbal noted.
However, he termed the order of reopening as a positive development and exuded confidence that the government would take more proactive steps for the betterment of the industry.