In stark contrast to the febrile atmospheres of the US and UK, stricken respectively by the recent government shutdown and daily Brexit grind, there was an air of comparative tranquillity in Chennai, as the ribbon was cut on the 34th edition of the India International Leather Fair (IILF).

Of course, that is not to say the Indian leather sector has been immune to its own set of challenges. Concerns remain over its environmental performance, with effluents discharged by tanneries in the country’s main leather cluster in Kanpur still finding their way into the Ganges.

Meanwhile, leather garment and footwear manufacturers are pleading with the government not to treat semi-finished leather as a finished product fit for export. This approach, they argue, continues to have a negative impact on the availability of raw materials.

Elsewhere, economic and political factors in the EU – which consumes over 50% of India’s leather products – have taken a bite out of exports. That said, year-onyear shipments of leather products and footwear increased by 5.25% (in rupees) between April and October 2018. By the World Footwear Yearbook’s reckoning, India remains the second-largest consumer and producer of global footwear behind China.

So, hardly a picture of doom and gloom. As such, any disquiet was far from discernible at India’s premier leather trade event, running 1–3 February and held within the confines of the sprawling Chennai Trade Centre. As with previous editions of the show, the opening ceremony gave various dignitaries from the country’s leather sector the opportunity to project a story of hope and opportunity.

As the sun set behind the large frame of the exhibition hall, delegates were addressed by Thiru O Panneerselvam, deputy chief minister of the government of Tamil Nadu, on the sizeable role his home state continues to play in the Indian leather sector (it is believed to be responsible for 70% of the country’s total production). Furthermore, “the world has high expectations of our country”, the minister said.

In a later audience with the international press, PR Aqeel Ahmed, the new chairman of the Council for Leather Exports (CLE), pointed to a number of statistics as verification of a domestic industry for which the future is strong.

“Our industry has the potential to reach an annual growth in exports over the next two years of 9–10%,” said Ahmed. “Yes, there are challenges, but you only need to look at the International Monetary Fund’s recent global growth forecast for India this year, which at 7.5% is more than double that for the global economy [3.5%].”

Ahmed also cited India’s leap up the World Bank’s Ease of Doing Business table from 142nd place to 77th as evidence that, more than ever, the country is open to conduct increasing levels of trade on the export front and within the domestic market.

With the leather sector often presented as a major plank of Prime Minister Narendra Modi’s ‘Made in India’ initiative, it was unsurprising to see government officials also present in Tamil Nadu, including Nidhi Mani Tripathi, joint secretary of the Department of Commerce. Describing leather as a “heritage industry”, Tripathi spoke of opportunities for India to become “more competitive in the international market”, in reference to reports of production problems in rival markets China and Vietnam.

Bigger and better

Co-organisers CLE and the Indian Trade Promotion Organisation (ITPO), along with other domestic leather bodies, were keen to point out that this year’s show was bigger and better than those that have gone before.

Official figures are yet to be confirmed, but CLE and ITPO had predicted at least 450 exhibitors on the trading floor, with footfall in the region of 15,000. As a perennial visitor to Chennai at this time of year, Leather International can corroborate that, judging by the thronged gangways of the exhibition hall, numbers seemed to be up compared with previous editions.

The international leather community was well accounted for, including the usual suspects Germany, Brazil, China and, of course, Italy, which boasted the highest attendance, sending out over 40 companies – mainly machinery players – to man the stands. Such was the weight of the Italian contingent that Italian Trade Commissioner of the Embassy of Italy to India Dr Francesco Pensabene was a guest of honour and speaker at the opening ceremony.

Other nations were also represented, with Ethiopia given a special mention in the ITPO’s programme notes. However, such are the present spatial limits of the Chennai Trade Centre, “some companies from other countries didn’t make the cut”, admitted one ITPO dignitary.

Sourcing raw materials

Away from the hustle and bustle of the trading floor, within the walls of the opulent ITC Grand Chola Hotel, IILF also hosted a raw material sourcing meet, attended by international suppliers (of finished and semi-finished leathers and raw hides), and Indian importers and manufacturers of leather products and footwear.

Raw material sourcing remains a perennial talking point for the Indian tanning sector. Due to being one of the largest livestock-holding countries in the world, India is able to produce three quarters of leather annually. However, with the industry targeting a turnover of $23.47 billion – as set by the government – it needs to produce around five billion square feet of leather to meet demand.

With representatives from 17 countries, including Brazil, the US, Australia and Iran, the meeting – only in its second year – was used to discuss new means of sourcing raw materials, particularly from abroad.

India’s leather products consumed by the EU.
World Footwear

“We don’t have all the raw materials here in India, which means we have no option but to import,” said Ahmed. “This is important if the industry is to continue to grow.”

India’s ranking in the World Bank’s Ease of Doing Business table, up from 142nd place.
World Footwear

Design and technology

Further along one of Grand Chola’s labyrinthine corridors, the Designers Fair – now in its fourth year – created something of a buzz, attracting more than 50 participants. Having grown considerably in size since its first outing in 2016, the mini-fair has now cemented itself as one of IILF’s key events. Indeed, addressing delegates via video link-up, Minister of Commerce and Industry Suresh Prabhu urged the national leather sector, saying “I want to see more designing”.

The same goes for innovation and technology. By way of entertainment, one segment of the annual fashion show on the eve of the fair saw the models on the runway replaced by drones, carrying leather items in their winches.

Throughout his two meetings with the press, CLE’s Ahmed spoke of the need to push ahead with digitalisation. This is in keeping with one of the central themes of an OECD report last year – entitled ‘Economic Outlook for South East Asia, China and India’ – which indicated that a shift to such information and communication technology within manufacturing and services is linked to an increase in the value of exports. This includes the leather sector, evidently.

Later this year, Indians will go to the polls for the country’s general election. According to analysts, it is set to be the closest contest in years, fought out between Modi’s Hindu nationalist BJP party and the Congress Party, led by Rahul Gandhi. Those within the country’s leather sector, from manufacturers to designers, will be heavily invested in the result – as aforementioned, the leather sector makes up a major cog of Modi’s Made in India initiative.

The CLE makes no secret of its reliance on support from New Dehli. Recently, the organisation has issued a number of requests, ranging from lower tax rates and interest rates on credit to the finalisation of free trade agreements with the likes of the EU, Canada and Australia.

Whichever party prevails come May, the Indian leather industry – which stands at a crucial juncture – should expect to retain its status as a focus sector.

India’s growth in numbers

  • IMF projects India’s economy will grow by 7.5% and 7.7% in 2019 and 2020 respectively – over twice the growth forecasted for the global economy in the next two years (3.5% and 3.6%, respectively).
  • Last year, India replaced France as the world’s sixth-largest economy (based on GDP).
  • India has risen from 142nd to 77th in the World Bank’s Ease of Doing Business table.
  • The domestic leather industry employs around three million people.
  • India’s imports of raw materials are reported to be worth $500 million.
  • Leather exports are likely to reach 5–6% in the fiscal year ending 31 March 2019, according to CLE.