India versus China10 July 2008
India and China are the giants of the leather industry, both countries having witnessed huge growth in leather processing over the past few years. While there are similarities between the two countries it is the differences which are most notable. For India tanning is a traditional industry and the country has an extensive livestock base.
In leather terms China came much later to the world arena but witnessed a spectacular growth. Despite their tradition and raw material resources, India was swiftly overtaken by China which for a time seemed to be unstoppable. Not so, now that the need to tackle pollution has been taken up by the Chinese Government. But how was it that China was able to snatch the world market from under the noses of the Indian tanners? India is the fastest growing democratic economy in the world but this does not translate into swift action. China answers to no-one and has the capacity to act quickly and ruthlessly when the need arises. In China, tanneries are being shut down in the run up to the Olympic Games and longer term, customs tariffs are aimed at discouraging beamhouse activities within the country. This is likely to cause great hardship to the tanning industry in the country because leather industry workers tend to be among the lowest paid in any country. By shutting down tanneries the authorities are throwing the poorest people out of work. In India, such moves are inconceivable. The Indian Government is committed to raising people from below the poverty line and is setting, possibly unrealistic, targets for the leather industry not just for the foreign exchange benefits but because a growing industry generates more employment. The Union Government of India has the largest employment guarantee scheme in the world. The Rajiv Ghandi rural employment guarantee scheme promises 180 days of employment each year within a five mile radius of home. The leather industry is crucial to this with hides and skins collection offering one possibility. More than one million of the poorest people in India are involved in some way with the leather industry. If the government gets its way, increased leather exports could generate another 500,000 jobs. Jobs for women are another way of finding more money for families who are scraping an existence and, again, the leather and related industries provide opportunities here. According to the CLE, every US$800 invested in the leather sector creates a job. India is a vast country comprising many different states, different languages, different scripts, different religions, different food and different appearances. There are also geographical differences, including climatic ones. India can be likened to the European Union in terms of size and variety of cultures and nationalities. And I was told in India that the unifying factors which hold this wide ranging mixture of peoples and cultures together include their historic struggle for independence and also the English language. I generally feel an overwhelming need to apologise for what England has done in the past, and subjugating the Indian nation is one of the many things I feel badly about. However, the current and generous view of some of the people I meet is that the position of servitude which was forced upon them have made Indian people hugely tolerant and able to cope not only with the union of their country (with obvious exceptions) but also with their partners in business. It seems that few people, the Chinese included, have a clear idea about the likely future of the leather industry in China and in the south east Asia region generally, although rising labour costs, particularly in Dongguan and Shenzen, have dented Chinese production cost advantages. One thing is certain, there is little likelihood of any clarity in the Chinese industry until after the Olympic Games and probably not even then.