Leather and Footwear Industry – Huge potential for growth

The leather and footwear industry is a labour intensive sector, providing employment to 4.42 million people. This is one of the largest sectors providing employment to women, as about 40% of workforce are women.

The industry has achieved several milestones. India is the second largest exporter of leather garments , third largest exporter of Saddlery & Harness and 4^th largest exporter of Leather Goods in the world.

It is estimated that about 0.5 million unemployed people have been employed in this sector in the last five years after undergoing training under various Government schemes. Hence, the sector has very good potential for generating additional employment opportunities in Post COVID period.

India is the second largest consumer of footwear in the world and its leather products and footwear market is estimated to be about USD 12 billion. Besides, India’s annual export of finished leather, leather products and footwear is about USD 5 billion. With its inherent strengths of huge raw material base, traditional knowhow, skilled manpower and application of modern technology, India has established its own reputation as a supplier of high quality goods.

100% FDI is already permitted under the sector under automatic route.  The Government is implementing the Indian Footwear, Leather and Accessories Development Programme (IFLADP) with an outlay of Rs.2600 crore wherein financial support is provided for core areas namely capacity augmentation and technological upgradation of production units, upgradation of CETPs, HRD, establishment of institutional facilities etc., Thus, the huge market potential combined with support measures and ease of doing business measures of the Government have made Indian leather and footwear industry an attractive investment destination.

There are bright opportunities for start-ups in the leather and footwear sector, as there are good prospects for growth both on the domestic front and in exports, post COVID. The Mega Leather, Footwear and Accessories Development Cluster (MLFACs) will be coming up in various States like Uttar Pradesh, Tamil Nadu, West Bengal, Maharashtra, Andhra Pradesh etc., which will be integrated production centres with plug-and-play model of factories and common facilities like testing laboratories etc., These MLFACs are a good platform for Start-ups.

We thank the Government of India for announcing series of support measures during the Pandemic period.  These include the following major measures.

• The definition of Micro, Small and Medium Enterprises were revised on account of which about 98% of the units in the leather, leather products and footwear sector are under MSME as against 92% earlier
• The revised finished leather norms were notified vide DGFT Public Notice No. 15-2015/20 dated 4^th September, 2020. This will facilitate export of new types of leathers which are in huge demand in the global market and will enhance export of finished leathers from the country
• The validity of Duty Free Import Scheme (DFIS) (allowing Basic Customs Duty exemption for notified inputs to the extent of 5% of FOB value of exports in previous year for footwear and other leather products and 3% for Leather Garments) for the year 2019-20 was extended upto 30^th September, 2020 (facilitating manufacture of export products in the sector)
• Apart from above measures, extension of Foreign Trade Policy (FTP) till March 2021, continuation of interest equalization on rupee export credit till March 31, 2021, etc., have also been taken by the Govt. to facilitate promotion of exports in the sector.

The Council for Leather Exports has been playing an active role in the overall growth and development of the leather and footwear industry.

Despite the Pandemic, the Council for Leather Exports is undertaking a multi-pronged,  aggressive and pro-active marketing strategy to tap the potential available in various markets. We have had B2 B meetings with buyers in Vietnam and Korea. We have organized Virtual Buyer Seller Meets with Russia and Peru. We are planning such Virtual BSMs in 7 countries namely Germany, Canada, Australia, Italy, Vietnam, UAE and UK during 2020-21. Besides, CLE has participated in virtual exhibitions namely Footwear & Leather Show, Australia ; Magic Show, Las Vegas held from Sept. 15 – Dec. 15, 2020 and is participating in the January 2021 edition of Expo Riva Schuh Fair held in Riva Del Garda, Italy which is one of the major fairs for footwear . Physical editions of three other major fairs in Italy namely Mipel, Micam and Lineapelle are scheduled in March 2021 wherein CLE will be participating.

Besides direct marketing, we are actively engaging with overseas Trade Associations to facilitate business tie-ups. We have webinars with British Footwear Association (BFA); US Fashion Industry Association (USFIA) and Footwear Distributors and Retailers of America (FDRA).

On the whole, the leather and footwear industry has very good potential for growth and development both on the domestic front and in exports.