Slower growth for Indian leather exports
7 August 2012With traditional markets such as Europe and US witnessing economic turmoil, Indian leather exports are expected to witness a slower growth in the current financial year as compared to last year. Leather exporters in the country are facing a considerable decline in volume exports to these major destinations, leading most of them to turn to other markets such as South Africa and South Asian countries.
Leather goods exports, which grew by 29% in the last financial year, is expected to grow by 20% up until March 2013, commerce secretary S R Rao said. Due to the uncertain environment, global trade is contracting and there is a need for India to come up with innovative solutions to increase its market share, he added.
During the first eleven months of 2011-12, India recorded leather goods exports of $4.5 billion. With Europe and US accounting for a major share of India's exports, exporters say export volumes have gone down by nearly 25% year-on-year. While the rupee depreciation has provided some relief, it has failed to counter the losses incurred by them as cost of importing chemicals has shot up consequently
Leather export major Superhouse, which owns footwear brands like Allen Cooper and Double Duty, said exports of leather goods for the company has declined by over 8% due to lack of demand in European countries. The company, which exports 90% of its goods to Europe, is exploring other markets such as South Africa and Russia for growth.
"The rupee devaluation has helped us, but there is a visible decline in exports. We expect the European economy to continue to perform badly for us in the short term," said Rizwan A Khan, Director, Superhouse.
Another export house, Alig International, which exports 40% of its goods to Europe, said export volumes have declined by 25%. While raw material costs have increased, a consequent increase in prices of end products has dented consumer buying sentiment leading to loss of business, Jamal Ahmed, administrative head of the company said.
Even as Indian exporters are receiving orders from other countries, the Council for Leather Exports (CLE) said orders are low at the moment. The CLE is expecting a minimum growth of 15% in leather exports this financial year. "Our share of market in the US and Europe is still small. Despite the slow growth, there is still scope for us to grow our market share," Rafeeque Ahmed, chairman, CLE said.
Currently, Germany, UK and Italy are among the biggest markets for Indian leather exports.
Source: The Times of India
