THE ROLE OF LEATHER INDUSTRIES IN THE

DEVELOPMENT OF OUR ECONOMY

NEERAJ KUMAR
Research Scholar, Department of Economics, Mewar University, Chittorgarh Raj. (India)

ABSTRACT
The leather industry is one of the oldest traditional industries. It makes significant contribution towards
economic growth, balanced regional development, employment generation and overall poverty reduction in the
field of leather and allied product manufacturing. The Leather industry is bestowed with an affluence of raw
materials as India is endowed with 21% of world cattle & buffalo and 11% of world goat & sheep population.
Added to this are the strengths of skilled manpower, innovative technology, increasing industry compliance to
international environmental standards, and the dedicated support of the allied industries. The leather industry is
an employment intensive sector, providing job to about 2.5 million people, mostly from the weaker sections of
the society. Women employment is predominant in leather products sector with about 30% share.

Keywords: Contribution, Economic growth, Employment Generation.GDP, Poverty reduction

I. INTRODUCTION

Leather sector occupies a very important place in the development of our economy on account of its substantial
export earnings, potential for creation of employment opportunities and favorable conditions for its sustained
growth. There is a large potential to increase the domestic production and exports.
The Leather Industry holds a prominent place in the Indian economy. This sector is known for its consistency in
high export earnings and it is among the top ten foreign exchange earners for the country.
With an annual turnover of over US$ 12 billion, the export of leather and leather products increased manifold
over the past decades and touched US$ 6.5 billion during 2014-15, recording a cumulative annual growth rate of
about 13.10% (5 years).
The Leather industry is bestowed with an affluence of raw materials as India is endowed with 21% of world
cattle & buffalo and 11% of world goat & sheep population. Added to this are the strengths of skilled
manpower, innovative technology, increasing industry compliance to international environmental standards, and
the dedicated support of the allied industries.
The leather industry is an employment intensive sector, providing job to about 2.5 million people, mostly from
the weaker sections of the society. Women employment is predominant in leather products sector with about
30% share. The leather sector is working the following segments are given below:
Tanning sector
Footwear
Leather Garments

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 Leather Goods & Accessories Sector including Saddlery&harness.

II. LITERATURE REVIEW

Leather industries play an important role in the development of our economy, While describing some basic
issues pertaining to the leather industries in developing economies, Some review of literature are given here.
Shetty (1963) pointed out that the technological base in the industry was extremely primitive and a unit was
rarely interested to adopt technological modification in the process.
Usha (1985) based on Tamil Nadu Leather Tanning Industry in Year 1978-79.she focused attention on some
selected issues related to the structure of work force, Mechanization and the prospect of the traditional skilled
and unskilled workforce in the industry. Her Major findings were that the leather tanning sector in Tamil Nadu,
about 90.0 per cent of the total entrepreneurs belonged to the Muslim Community and rest belong to the Hindu
Community. As regards the Mechanization of Industry, most of the tanning and manufacturing units were using
Labor-intensive technique, in which the skilled hand workers formed a majority of the workforce.
Qureshi (1990)discussed some issues of leather making artisans of Mewat region in the district of Gurgaon,
Haryana A large Majority of Leather Products makers were facing problems of inferior quality of goods, time
consuming, less profitability, low prices for products, non availability of credit and payment delays.
Sahasranaman (1993)pointed out some basic problems of the leather product industry. According to this study,
in the Leather product Industry, the dominance of traditional production system, confinement of production to a
particular community, absence of modernization of technology, were the basic problems of the producers.
Chandramoulis (1999)on Leather and Social Development focused on some characteristics of Leather
Industry. The author stated that the production of leather and leather products involves various socio-economic
activities. The economic activities were largely in the form of generation of income, creation of employment,
etc. On the other hand, the production of leather and leather goods led to the social development in the form of
understanding, awareness, social equity, better health, education and nutrition.
Bhavani (2010) highlights the issue of quality employment generation by the SSIs and negates the short term
attitude of increasing the volume of employment generation compromising with quality. The author argues that
employment generation by the SSIs may be high in quantitative term but very low in quality. Technological up
gradation would enable the small firms to create quality employment improving, duration and skill. This
structural shift may reduce the rate of employment generation in the short run but would ensure high-income
employment generation in the long run.

III. OBJECTIVE OF THE STUDY

The proposed investigation has the following objectives:

To examine the role of leather industries in the growth of our economy.
To investigate how the economic performance of industry determines.

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IV. RESEARCH METHODOLOGY

Data are mostly collected through desk research of online resources, research papers, conference documents,
and other publications. Data from Council from leather export has been used. Annual report on MSMEs, Annual
report of ministry of commerce and industry, various annual reports of State Financial Corporation, and various
financial institutions have been used.
The data have been compiled from three types of sources: published documents and reports, the World Wide
Web and statistical agencies. All data sources are listed at the end of this note and Web links are provided where
possible. Simple statistical tools have been used for analyzing data.
Analysis of Export Performance of Leather and Leather Products April-August 2015 vis--vis April-
August 2014
As per officially notified DGCI&S monthly export data, the export of Leather and Leather products for the
period April-August 2015 touched US$ 2653.64 mn as against the performance of US$ 2872.64 mn in the
corresponding period of last year (April-August 2014), recording a negative growth of -7.62%. In rupee terms,
the export touched Rs. 169367.00 million in April-August 2015 as against the previous years performance of
Rs. 172557.35 million registering a negative growth of -1.85%.
A Statement showing the Product-wise Export performance during April-August 2015 vis--vis April-August
2014 is given below:
Table 1: product wise Export Performance during April-august 2014
Value in US $ MILLION

Category April -Aug 2014 April -Aug 2015 % share

Finished leather 605.47 486.34 18.33%

Leather footwear 1010.22 962.75 36.28%

Footwear component 171.61 134.68 5.08%

Leather garments 264.11 260.22 9.81%

Leather goods 606.06 590.83 22.26%

Saddlery and hardness 74.07 63.35 2.39%

Non leather footwear 141.11 155.47 5.86%

Total 2872.64 2653.64 100.00%

Source: ITC, Geneva & DGCI &S, Kolkata

In Rupee Terms, export of leather & leather products have shown positive growth in all the product
segments during the period April-August 2015.
In Dollar Terms, export of leather & leather products have shown positive growth in all the product
segments during the period April-August 2015.

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Country-Wise Analysis:
Major export markets are USA 14.35%, U.K. 12.32%, Germany 11.09%, Italy 6.95%, Hong Kong 5.85%,
U.A.E. 5.66%, Spain 5.56%, France 4.94%, Netherlands 3.02%, China 2.90%, Vietnam 1.81% and Belgium
1.42%.
These 12 countries together accounts for nearly 75% of Indias total leather& leather products export.
Export of leather & leather products to major markets like Germany, Italy, France, Hong Kong, Russia,
Netherlands, Denmark, Greece, Canada, Switzerland, Sweden etc. Have shown negative growth during April-
August 2015. However, export of leather and leather products to the markets viz., USA, New Zealand, South
Africa, Japan, UAE, Korea Rep. Etc., has recorded positive growth during the reporting period.

Figure 2:Percentage share of footwear in export

Source: ITC, Geneva & DGCI &S, Kolkata

V. CONCLUSION

Continuous export growth in the various segments of leather industries shows that the leather industries play a
vital role in the development of our economy. India can generate additional economic development growth by
fostering leather industries activities within its borders, particularly within its burgeoning middle class. Not only
has leather industries been found to yield significant economic benefits in a wide variety of nations, but India
specifically has reached a point in its development where it can achieve similar results through other industries
efforts. Among other things, India is poised to generate new business startups in the high technology area that
can help it become a major competitor in the world economy.

REFERENCES

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[1] HussainAbid, (1997), Report of the Expert Committee of Small Enterprises, National Council of Applied
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[2] Desai, Vasanta (2000), The Dynamics of Entrepreneurial Development and Management, Himalaya
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[3] Bhattacharyya, D.K (2004), Research Methodology, Excel Books, New Delhi.
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Industry of Delhi state, Ph.d Thesis, JamiaMilliaIsllamia New Delhi
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[7] Annual Report: Ministry of Micro, Small and Medium Enterprises
[8] www.leatherindia.org
[9] www.fddiindia.com
[10] www.vvgnli.com
[11] www.msme.gov.in
[12] www.msme.org
[13] www.sidbi.com
[14] www.smallindustryindia.com
[15] www.ssi.nic.in

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