Indian leather industry to gain in trade war between China-US: CLE

Steered by PR Aqeel Ahmed, Chairman, the Council of Leather Exports (CLE) is confident about the performance of the sector since domestic footwear exporters are receiving order requests from buyers in the US. Even Chinese leather firms have evinced interest in setting up greenfield or brownfield projects (through joint ventures) in India, he said.

This follows a visit during the last week of December to China, made along with InvestIndia and DIPP (Department of Industrial Policy and Promotion), to attract investments into the country. Over 300 companies took part with many one-on-one meetings that spelt out the interest of perceiving India as a potential investment destination.

Ahmed said with America imposing lot of sanctions on Chinese products, gave India an edge. However, he cautioned that domestic footwear was also under the WTO scanner with the US opposing the “unfair” package given to Indian leather industry, that symbolised protectionism.

But, the leather sector continues to scout for growth opportunities, focus on increasing market share by tapping the US, Latin American countries, Japan (for shoes) and Korea. Indian products can make headway in these countries by following the best practices of China or other global destinations like Vietnam, which has seen 4000 per cent growth in last few years, he said, noting that the Centre has encouraged the sector immensely.

GST and DeMon made the refund mechanism robust, the industry more transparent and also attracting foreign buyers, who were largely benefited by the uniform tax, he added. R Selvam, ED, CLE, said 30 per cent of the 4 mn employed in this sector were women. Of this, 85 pc came from the south. Of the $18 bn industry, exports constituted around $6 bn. The major market is the EU, accounting for 55 per cent of the exports with US generating $840 mn business. The potential of US had not been tapped even as SE Asian companies were emerging in a big way. The 10 pc import duty imposition by the US positioned India as a potential alternate destination.

Ahmed added, “India accounts for 2-3 per cent of the US leather imports.” Last November, a visit to NYC and the participation of 56 Indian companies through exclusive India show, reflected the sector’s business. “From two buyer seller meets in 2016, the leather industry took part in eight overseas trips. This year, we have scheduled buyer-seller meet every month,” he said. Also, the second-hand footwear market is big in Africa where Indian companies could offer first-hand products at second hand prices.