“The fall is because the industry saw record profits last year,” said Chairman of the Council for Leather Exports, Rafeeque Ahmed. “While sales have been hit because of the overall slowdown in Europe, the decline is seen because exports this year haven’t matched that of last year,” he said. The Indian leather industry last year saw its highest-ever exports of $4.9 billion, a 23% growth over the previous year.
During the first half of this year, exports to major markets such as Germany, Italy, France, Spain, Netherlands went down. According to the DGCIS, the decline is seen in export of leather footwear, footwear components, leather garments and saddlery and harness partly due to rupee depreciation. Over the next two quarters, exports are expected to increase since companies would see demand for spring-summer 2013 collections, Ahmed said. The industry is targeting roughly $ 6.1 billion of exports by the end of the year.
With the slowdown in the European markets, the Indian leather industry is increasingly focusing on newer markets such as China, Japan, South Africa and Australia. With the economic slowdown in Europe, and China’s leather industry facing issues with rising production costs and labour shortage, India has seen an increase in demand from China and other new markets such as Japan, Australia and Saudi Arabia. Exports to Japan, for instance, went up 36% and to Saudi Arabia went up 22% during April-September 2012 compared with last year.
Source: The Times of India
