The country's import of raw leather is set to rise on the back of a buoyant demand both in domestic and exports markets.

Imports are likely to grow to 25-30 per cent of annual raw leather production in the country in the next two years, as against the current 15-20 per cent, Mr Paresh Rajda, Chairman, East, Council for Leather Exports (CLE), said. The country has an annual production of about two billion sq ft of raw leather.

According to him, despite a strong bovine population in the country – India accounts for 21 per cent of the world cattle and buffalo and 11 per cent of world goat and sheep population – imports are expected to go up following an increased demand for leather goods.

Last updated figures (in September 2010) of Livestock Population according to the National Dairy Development Board study pegs the total bovine population in the country in 2007 at 304.4 million. The number of goat and sheep put together stood at 212.1 million. Latest data, however, was not available.

New markets

With an increase in import requirements, the country is likely to look at newer markets for procurement at lower costs.

Currently, high quality leather is imported from Latin American nations, while medium quality raw materials are obtained from African countries like Kenya and Ethiopia and Saudi Arabia.

“Imports for quality leather with specialised thickness will be in demand specifically because of overseas customers,” Mr Rajda told Business Line.

Export and domestic market

The total leather market in the country is pegged at about $ 8 billion (approx Rs 40,000 crore), of which exports account for almost $4.5 billion (approx Rs 22,500 crore) or nearly 56 per cent. Leather shoes and footwear account for almost 47 per cent of the total exports while leather goods account for about 28 per cent.

The Union Government has fixed an export target of $ 8.25 billion (approx Rs 41,250 crore) to be achieved by the year 2013-14, as against $ 3.8 billion (Rs 19,000 crore) in 2010-11. “Imports have to increase to meet the export target and to cater to the steady rise in domestic demand,” Mr Rajda pointed out.

Impact on price

Rise in imports might lead to an increase in price of finished products.

“Currently the price of leather goods is lower in India, this could inch up a bit as it will be determined by price in the international markets,” Mr Rajda said.

(This article was published on February 19, 2012)
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