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Leather Industry must gear up to be more competitive - CLE

29
Dec '08
Recession this year has put in a really bad effect in people's life which is quite evident from the fact that sales trend in stores has witnessed a sharp decline this year is very different from previous years. Indian Leather industry is also experiencing similar jolt.

Experts in the field opine that export of leather goods is likely to drop by 25-30 percent in the current fiscal along with several job losses. Export of these products touched US $3.47 billion in 2007-08 and the industry is very unlikely to achieve the target of $4 billion, in the present financial year.

This situation can be attributed to global financial meltdown. Available statistics show that every year, in December and the first two weeks of January, stores like Wal-Mart, Marks & Spencer experience around 30-35 percent of the total yearly footfall. However, this year, number of customers visitations were far lower till the third week of December.

European countries are the biggest importers of Indian leather goods like garments, bags, footwear, gloves and, saddlery and harness, followed by the US and Australia.

Speaking exclusively to Fibre2fashion.com, Mr Moti Lal Sethi, convener (leather apparel) of the Council of Leather Export (CLE), told, “The first six months of the year has shown positive growth while in the rest of the months, exporters started facing cancellation of orders, price reduction and quantitative reduction. Thus industry started seeing effect of global meltdown. The demand for high end products is likely to be effected more.”

To keep off the effects of global meltdown, Chinese Government has intervened thrice in last six months for reviewing the incentives of leather industry, so that the sector enjoys its share in global market.

Stressing on solutions to overcome this crisis, the CLE Convener asserted, “Indian Government's intervention is urgently required to ensure that all additional taxes and burden on exports are simplified, drawback rates are reviewed and incentives are granted to focus products. Deals should be enhanced so that exporters may be able to sustain the global share.

“Indian Leather Industry must gear up to be more competitive by adopting economy of scale. The sector has potential for growth and receives plenty of inquires but on account of price competitiveness, many buyers are not able to mature the business contracts with Indian exporters.”

Discussing the future of the Industry Mr Sethi stated, “Future of Leather Industry in India is bright because of attraction of Europeans and Americans towards India. It has been observed that these traditional markets are gaining confidence in Indian products and its deliveries.

“A proposal has also been given to the Government to help exporters to focus on these countries. Government must encourage them by allowing incentives & focus market schemes for growth in these markets.”

“Industry has shown aggressive growth last year but recession has slowed its rise. Only thing is industry people need to work hard to sustain the growth,” concludes Mr Sethi in an affirmative tone.

Fibre2fashion News Desk - India


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