The Indian leather industry would require over Rs 1,500 crore of investment in the next five years to develop necessary infrastructure to achieve the targeted $27 billion trade by 2019-20, from the current $12 billion, said J.S. Deepak, Chairman and Managing Director, India Trade Promotion Organisation (ITPO).

Addressing a press conference here today to announce the launch of the 30th edition of the India International Leather Fair (IILF), he said the government will allocate funds to programmes aimed at augmenting tanning capacity and skill development in the industry, as the leather sector has been notified as a ‘focus sector’ in the Make in India programme. “This was done with the objective of enhancing production and employment,” he said.

The exports of leather and leather products during the first eight months of the current financial year touched $4.45 billion against $3.8 billion registered in the comparable previous year period, representing over 17 per cent growth. Last year, the industry exported leather goods worth $5.9 billion. “We expect to double this to $15 billion in the next five years,” he added. According to him, the domestic market was at $6 billion last year, which is expected to grow to $12 billion in 2019-20.

The major markets for Indian leather goods continued to be Germany with a share of 12.39 per cent, the UK with 11.68 per cent, the US with 11.50 per cent, Hong Kong with 5.34 per cent, which is followed by Italy (8.77 per cent), France (6.39 per cent) and Spain (5.42 per cent). He said the future growth of the leather sector in the country will continue to be market driven. Keeping in view the conducive investment climate, growing global demand and India’s inherent strengths, “we can say the industry holds high growth potential in the years to come,” said Deepak.

In his address, M Rafeeque Ahmed, Chairman, Council for Leather Exports, said despite increased production capacity and improved designing capability, steep fall in tanning output is a major stumbling block for a sustainable growth. “Owing to lack of investment in suitable effluent treatment facilities, and non-availability of huge parcel of land to develop clusters in Tamil Nadu, there was a 35 per cent drop in tanning output,” he pointed out. However, he said, the newly formed Andhra Government has promised to develop a 360-acre cluster in Kothapatnam in Prakasam district at an investment of Rs 120 crore, which is expected to make up for this in the next couple of years.

On the IILF, he said the 3-day expo would attract 440 participants from over 23 countries from around the world. This has grown in stature, both in terms of area and participants. This year, the expo would be spread over 10,000 sq. metres from 9,300 sq. metres last year. In terms of international participants, it has grown from 98 companies last year to 142 this year, he added.