Leather industry looks at way forward once lockdown is over

TE Raja Simhan Chennai | Updated on May 15, 2020

The Indian leather industry, which employs nearly 4.2 million people, will recover in 3-4 months after the lockdown is lifted, and stabilise in 6-8 months hence, it is expected.

With some of the leading markets such as Italy, Spain and Germany opening up, domestic leather industry officials feel India in an advantageous situation given the current negative sentiments against China, and should not miss this opportunity. Vietnam could be a serious competitor for India, said officials of leading leather companies in a recent webinar. .

The need of the hour during the lockdown is to survive, activate and revitalise. Retailers who align themselves more closely with their shoppers by identifying a shared purpose will foster loyalty, they observed.

Mega opportunity

N Mohan, Executive Director and CEO of Clarks India, said India’s footwear consumption has been growing at a CAGR of 7.6 per cent and, with the per capita consumption improving to two pairs per person per annum, the Indian industry has a huge opportunity. For every 1,000 pairs produced and sold in India per day, 425 jobs can be created, from manufacturing to allied industries to retail. This is a great opportunity for the industry, he added.

India’s advantages include the availability of a large, young and low-cost workforce, existing footwear clusters such as Chennai, Agra and Kanpur with a sound knowledge base, and a huge domestic demand, Mohan said.

“The industry needs to focus on non-leather footwear exports as, worldwide, 86 per cent of footwear in terms of volume consumed are non-leather. There is a phenomenal opportunity for this sector,” he added.

Non-leather footwear

Raj Kumar Gupta, National President, Confederation of Indian Footwear Industry, said the non-leather industry requires a big thrust and it is important for all the stakeholders to come together on a single platform to address the industries’ woes and create a strong road map for the future. There is a great opportunity to create a big cluster if the government and industry can come together to create the ecosystem for non-leather footwear, he added.

Aqeel Ahmed, Chairman, Council for Leather Exports, said that though there are several order cancellations due to the pandemic, some businesses are expected to shift to India. Exporters need some handholding to survive the crisis, he added.

Brand India as a footwear destination should be projected around the world post lockdown, said Ahmed. He also felt a reduction in GST, especially for footwear above ₹1,000, may help improve consumption.

It is very important to amend labour laws to give entrepreneurs the confidence to invest more in creating larger capacities, said Ramesh Dua, MD, Relaxo Footwear. India has the capability and resources, but the labour laws need amendment and the industry would be willing to invest in technologies if there is a focus on the non-leather footwear sector, he added.

Published on May 15, 2020

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