The Hindu Business Line : Leather goods exports slip

EXPORTS of leather goods during the first five months of the current fiscal year stood at $797.02 million which was 3.1 per cent lower than that of the same period in 2001-02.

Leather footwear and leather goods and non-leather footwear were among the three sectors to have registered positive growth rates during this period, according to figures released by the Commerce Ministry.

Leather is among the top eight export earners for India with the sector providing employment to over two million people. Nearly 65 per cent of the production of leather items was in the small and cottage sector.

Industry sources saw this as only a marginal drop linking it with the decline in overseas demand for some product categories like finished leather (which occupies nearly 30 per cent of the total space in the Indian export basket) as well as the drop in exports of shoe components.

Global demand for leather garments too has dropped. Countries like Germany which is a major importer of India leather garments registered a negative growth in imports between April and August 2003. But the Council for Leather Export (CLE) officials felt that overall decrease could be neutralised somewhat, by increased competitiveness, higher productivity and prudent sourcing of raw material.

Despite the stagnation in exports (which stood at Rs 37,193.2 crore against Rs 40,178 crore in the period under review), CLE (the industry apex body for exports) was optimistic that the year's target of $2 billion will be reached.

"As the figures start pouring in there are indications that from September the declining trend has begun to reverse," sources said. But this ray of optimism could not mask the gloomy situation that pervaded the shoe export sector. "Unfortunately India's full shoe export is not growing to the desired extent," sources said.

It may be mentioned in this context, that India's exports of footwear components has been showing steady erosion in value. This is primarily attributed to the closure of many shoe factories abroad on grounds of competition. e

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