Date:01/08/2005 URL: http://www.thehindubusinessline.com/2005/08/01/stories/2005080101800500.htm

Back Leather goods exports clock 6 pc growth in 2004-05

Our Bureau

New Delhi , July 31

EXPORTS of finished leather goods registered an increase of six per cent at $2.3 billion in 2004-05 against the previous year, according to PHD Chamber of Commerce and Industry (PHDCCI), which has carried out a sector-wise analysis of the Indian export basket.

According to the analysis, the small-scale sector is fast gearing itself to meet the challenges of global competition and quality standards needed to penetrate newer markets.

In the post-reforms period, the leather goods sector has been able to consolidate and has successfully reached new shores in Asia, Europe, and the Americas.

The analysis also found that products ranging from bags and apparel to shoes, belts, and car upholstery are making deep inroads into China, which is fast emerging as one of the favoured destinations for Indian finished leather goods.

Indian exports to China were valued at $32.7 million last fiscal, a growth of 43 per cent.

According to the analysis, these goods have been able to find acceptance in countries such as Croatia, Slovakia, Cyprus, Serbia, the Dominican Republic, and many more where they had no presence till last year.

Countries belonging to the Association of Southeast Asian Nations too have emerged as one of the largest importers of Indian finished leather goods, with Vietnam alone importing worth $23 million of goods during 2004-05.

Exports to Malaysia witnessed 57 per cent growth over the same period last year at $15.6 million.

The analysis has, however, said that though overall Indian exports to Europe have stagnated at 22-24 per cent growth rate, the main challenge to Indian leather products is coming from countries such as Pakistan, Bangladesh, and other developing nations.

Their low-cost products have saturated the markets in the world's fashion capitals - France and Italy.

Therefore, finding more promising markets in Asia and other parts of the world would hold the key for the sector's quest for higher growth path.

Another problem identified in the analysis is the huge domestic raw material deficit, which is proving to be one of the biggest impediments for the sector's effective growth.

To overcome this hurdle, efficient livestock population management and significant expansion of the production base would be needed.