CHENNAI: The leather industry in the country is on a high. In just two months, export of leather goods has seen a 10% jump. And it has the government to thank for this. The Centre imposed restrictions on export of raw materials, instead prodding the industry to export finished products. This has curbed illegal exports and reduced the shortage of raw material for the industry.
The government has mandated all exporters to get their goods certified by the Central Leather Research Institute (CLRI), to ensure that only finished leather that has some 'value add' by Indian companies and has qualified guidelines given by the CLRI can be exported. Certification by CLRI was earlier optional, but has now been made mandatory to regulate exports and curb illegal exports of semi-processed leather.
"This, coupled with the depreciating rupee has driven the Indian leather industry to bounce back, with exports growing 10% over the last two months compared to the previous quarter," said M Rafeeque Ahmed, president of Federation of Indian Export Organisations (FIEO).
Over the last few quarters, leather exports were falling due to the slowdown in the European region - the highest importer of Indian leather. However, things are looking up now that the Eurozone has recovered from the recession.
The industry has seen a 9.7% growth in exports of finished products over the last two months alone. According to data from the Director General of Commercial Intelligence and Statistics (DGCIS) of the Ministry of Commerce, India's export during April-May 2013 was $809.85 million against $738.18 million last year. "We expect this to continue and see a 12% growth over the next few months," Rafeeque Ahmed said.
DGCIS data showed that export of leather and leather products during 2012-13 had touched $4.99 billion compared with $4.8 billion last year.
Though finished products (especially footwear) constituted a large chuck of leather exports, large quantities of raw hides and semi-finished leather were being exported to China and Italy as raw material, leading to shortage of leather for the domestic industry. The policy to curb raw material exports could remedy the situation.
"The regulation would mean that more finished leather products will be exported rather than raw material. Prices of leather products have been going up of late and this will benefit the Indian industry," said N Shafeeq Ahmed, vice chairman, Council for Leather Exports. This change in policy will ensure that more leather is available for local manufacturers and could result in softening of prices, said Rafeeque Ahmed. Exports apart, this move will also create employment for the leather sector, which is one of the largest employers in the country, Shafeeq Ahmed said.
Source:- timesofindia.indiatimes.com
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