Whither Indian Leather Industry in the present confused world market?

WHITHER INDIAN LEATHER INDUSTRY IN THE PRESENT CONFUSED WORLD MARKET ?

V M KHALEELUR RAHMAN


The present crisis in the leather industry as we all know is due to international economic fears and factors, an impact of globalisation, rather than anything else unlike the slump at around 1998 when countries like Pakistan and China had outdone Indian exporters because of their competitive prices based on far higher exchange rates of the US dollar available to them. It was seen after a developing golden period of about 25 years. But the industry succeeded in overcoming it and made many strides in the overseas as trustworthy supplier of leather and leather products.


The impact of the present international crisis on the Indian leather industry is peculiar. Hectic activities witnessed in shoe, garment, leather goods and leather have come to a slow pace not only in India but the world-over. There are reports of serious repercussions such as bankruptcy even in the advanced countries like the U.S. As far as India is concerned, the market is slow as overseas orders are limited, choosy and at their prices resulting in financial crunch, job cuts etc. Consequently the prices of raw hides and skins have come down considerably depending on the quality, selection and area.

In wetblue cow hides – a well traded item - while higher grades are in good demand with a reduction of 10 to 15% in prices, lower grades are slow in movements despite as high as 20 to 25% reduction in prices as there are no much takers. In tanned and wetblue goat and sheep skins the downward price variations are about 15%. This has made the speculators jittery and stock holders lose heavily.

I interviewed some industrialists on the issue. They are of the opinion that the leather industry accustomed to ups and downs will overcome the crisis and march forward successfully as it has been built on sound footings during its golden period (1970 to 1995)

It was during this period – a quarter century – when the fate of the leather and leather products industry was changed. The industry progressed extremely well and made rapid technological advancement with modernisation and production of high quality leather and leather products such as shoes, garments, articles etc. creating a vast job opportunities for educated as well as uneducated alike. The labour demand was so much that even recruiting people came into existence in places like Ambur, Ranipet etc. It was possible for everyone to get a job. The industrial progress was so attractive that even doctors and engineers were lured to the leather industry. This historic development was possible with the excellent government policies, determination and perseverance of the industrialists and technological know-how of organizations like the Central Leather Research Institute (CLRI)

Boom and bust are a natural phenomenon in any industry depending on demand, supply and other national and international factors. The world is a big market for the Indian industry and our economists say that the demand is and will continue be so much that our country can go on expanding with the resources at our disposal and with the support and progressive policy of the government.

SELF-RELIANT ECONOMY

India economy is mostly self-reliant. It is believed that the present unfavourable condition created as the result of the worldwide recession will be over soon as the leather and leather products industry is well placed in the international market as the reliable suppliers of quality and standard products.

The present Dr. Manmohan Singh government has taken many important decisions to stimulate the economy suffered under the impact of the U.S. and Western industrial doldrums. It is also strongly believed in the industrial circle that the new government to be formed at New Delhi as soon as the parliamentary elections are over will consider the recommendations made by the Council for Leather Exports for the betterment of the industry before announcing a new exim policy with all stimuli to make Indian industries viable and strong to face the present challenges in the world market.

As well analysed in the editorial (Indian Leather, March 2009) quoting Mr. Mario Pucci, International Relations Director, ASSOMAC, the impact of recession has been moderated by good demand for shoes and leather garments in a very cold European winter this year.

Though the market is slow, prices are low and unemployment problems, industrialists are struggling with determination to find remedies to reverse the situation by increasing the growth and exports. The U. S., European and other customers will continue to operate in India as hitherto as it is a favourable market for them for reliability and quality leather and leather products. (V.M. Khaleelur Rahman in Indian Leather, April 2009 issue)

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