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In News: Fillip to Leather Industry

  • IASbaba
  • August 5, 2021
  • 0
All India Radio, UPSC Articles
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In News: Fillip to Leather Industry

TOPIC: General Studies 3

  • Industry
  • On the occasion of Azadi Ka Amrit Mahotsav, UT Administration in collaboration with Central Leather Research Institute (CLRI) is conducting workshops in Leh and Kargil to create awareness and explore the opportunities in Leather industry in Ladakh. 
  • Ladakh, with a tradition of rearing animals like Goats, Sheep, Yaks and meat consumption, has a scope for opportunities in Leather industry and entrepreneurship development.

Central Leather Research Institute (CLRI) 

  • CSIR-Central Leather Research Institute (CSIR-CLRI), Chennai Central Leather Research Institute, India was founded on 24 April, 1948 to develop an internal strength in the country to generate, assimilate and innovate technologies for leather sector.
  • CLRI has been playing a vital role in this transformation. On one side, it has been playing advisory role to Government in framing the industry-friendly policies and on the other side helping the industry by extending all technical advice and necessary technologies and technical manpower and made growth of the industry smooth and dynamic. 
  • The Government’s policy to export more value-added products which can generate more employment and earn higher foreign exchange was well appreciated by the industry.

Highlights of Product Segments of Indian Leather and Footwear Industry

  • Annual availability of leathers in India is about 3 billion sq.ft. India accounts for 13% of world leather production of leathers. Indian leather trends/colors are continuously being selected at the MODEUROPE Congress.
  • India is Second largest footwear producer after China, with Annual Production of 2.58 billion pairs (2018). India is also the second largest consumer of footwear after China, with a consumption of 2.60 billion pairs.
  • Footwear (leather and non-leather) export accounts for about 45.62% share in Indian leather and footwear industry’s export (2020-21).
  • India is the second largest global exporter and accounts for 8.03% share of India’s total export from leather sector (2020-21).
  • India is the fifth largest global exporter of Leather Goods & Accessories and third largest exporter of Saddlery and Harness items.

Indian leather industry:

  • The Indian leather industry’s growth has been from the pre independence days. 
  • India has an abundance of raw materials with access to good number of bovine animals:  20% of world’s cattle and buffalo and 11% of the world’s goat and sheep population.
  • The country accounts for 9% of the world’s footwear production. 
  • The industry is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the country.
  • The Leather industry is an employment intensive industry providing job to more than 4 mn people, mostly from the weaker sections of the society. 
  • Women employment is predominant in Leather products industry with about 30% share. The Leather industry in India has one of the youngest workforces with 55% of the workforce below 35 years of age.

Background of leather industry:

  • During 70s the industry was mostly exporting raw hides and skins. Based on Seetharamaiah Committee recommendations, in 1973, the Government has banned the export of raw hides and skins and introduced quota on the export of semi-finished leathers and several incentives for exporting finished leathers and products. 
  • As a result, and many positive developments both within and outside the country, the structure of the industry has undergone changes in a phased manner.
  • During early 80s India’s export basket consisted of mainly finished leathers. But mid-80 onwards the share of leather products has been gradually increasing. At present more than 80% of India’s leather exports consist of finished products.
  • The Council for Leather Exports (popularly known as CLE) set up in July 1984, is an autonomous non-profit company registered under the Indian Companies Act, 1956 entrusted with export promotion activities and development of the Indian leather industry.
  • Today we don’t export any raw material but only finished leather and leather products.
  • As of today, in terms of volume, we are the second largest producer of footwear, largest producer of saddlery and the second largest producer of leather garments. 

Strength of Indian leather industry:

  • Own raw material source – About 3 billion sq ft of leather produced annually
  • Some varieties of goat / calf / sheep skins command premium position
  • Strong and eco-sustainable tanning base
  • Modernized manufacturing units
  • Trained / skilled manpower at competitive wage levels
  • World-class institutional support for Design & Product Development, HRD and R & D.
  • Presence of support industries like leather chemicals and finishing auxiliaries
  • Presence in major markets – Long Europe experience
  • Strategic location in the Asian landmass

Challenges faced by the leather industry:

  • The quality and character of leather is prone to change when the parameters of processing are altered.
  • In most developing countries tanning operations is a family business, carried out in small to medium scale semi-mechanized units, very frequently grouped tightly in clusters which used to be outside residential areas. Thus, lack of properly trained staff at different levels remains one of the crucial constraints.
  • The Leather industry suffers from economic constraints. They suffer the often inordinately high cost of capital or inflation rates. Amount of capital tied up in work in-progress has increased along with the necessity to keep higher inventories of chemicals, machinery spares, etc. B

Way forward

  • The Government of India had identified the Leather & Footwear Sector as one of the 12 Focus Sectors where India can be a Global Supplier. 
  • With the implementation of various industrial developmental programmes as well as export promotional activities; and keeping in view the past performance, and industry’s inherent strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and dedicated support of the allied industries, the Indian leather industry aims to augment the production, thereby enhance export, and resultantly create additional employment opportunities.

CONNECTING THE DOTS:

  • The Leather Industry holds a prominent place in the Indian economy. Elucidate.

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