Export of leather and leather manufacturers, including sports goods, from India declined by nearly 10 per cent to $4.28 billion for the fiscal ending March 31, 2024 as against $4.75 billion in the previous fiscal. The drop was mainly due to poor demand from major markets like the US and Europe.

Tamil Nadu, the largest exporter of leather products, was the worst affected with export of leather products declining by 18 per cent to $1.66 billion in FY24 as against $2.04 billion in FY23, says Central Government data.

Tamil Nadu’s contribution in total leather exports dropped to 37.77 per cent in FY24 as against 43.20 per cent in the previous year. On the other hand, Uttar Pradesh, the second largest exporter of leather products, marginally increased its share to 27.77 per cent in FY24, as against 25.80 per cent, in the previous year.

The decline in exports from Tamil Nadu, follows the trend witnessed across India. The decline was due to poor demand from major markets like the US and Europe, said Israr Ahmed, Vice President, FIEO.

However, in the next couple of years, things will change in the State, with some of the major Taiwanese companies that have already commenced construction of large manufacturing facilities. Exports from Kanpur in Uttar Pradesh, which mainly manufactures safety leather products, were stable as the demand for such products was stable, he said.

Agreeing with Ahmed, the Executive Director of Council for Leather Exports, R Selvam said in the next couple of years, things will change in Tamil Nadu with major Taiwanese companies like Pau Chen group, Honk Fu, Feng Tae, Shoetown and Dean shoes that signed MoUs with the State Government to start production.

Recession in the US, UK and Russia /Ukraine war, having greatly affected the Eurozone are the primary reasons for decline. The US alone has seen a 35 per cent decline in exports, said M Abdul Wahab, Regional Chairman, Council for Leather Exports, Southern Region.

“However, in the current fiscal, we are witnessing good positive trends in exports picking up. Along with newer investments in the Southern Region especially sports footwear, we are confident to bounce back strongly,” he said.

On the decline in export of leather products, a senior official in the Tamil Nadu Government too, was optimistic that the Taiwanese company would help the State bounce back strongly in the next two years.

Taiwan rules in TN

Pou Chen Group signed an MoU in April, 2023 to invest ₹2,302 crore to manufacture non-leather footwear over a span of 12 years, especially for youth and women, in and around Kallakurichi. Around 20,000 jobs are likely to be created.

Long Yin Investment plans to set up a greenfield unit in Tamil Nadu to manufacture non-leather footwear industry with an investment of ₹1,500 crore and create 22,000 jobs.

TKG Taekwang plans to set up a greenfield unit to manufacture non-leather footwear with a proposed invesment of ₹1,250 crore to create 9,000 jobs.

In April, 2022, Hong Fu had inked a pact with the State Government to set up a footwear manufacturing facility at an investment of ₹1,000 crore in a three to five-year period. Land has already been allotted to the company at Ranipet.

Feng Tay has two factories in Bargur and Cheyyar and the third one in Tindivanam is under construction. The first factory at the Perambalur footwear park to make Crocs brand of footwear went on stream in November, 2023. The factory is set up by JR One Footwear Pvt. Ltd., a joint venture company between Phoenix Kothari Footwear Ltd. and Shoetown at SIPCOT Industrial Park in Perambalur district.