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  • The Leather industry in India holds a significant place in the Indian economy.
  • The Leather industry in India is consistent in its high export earnings and is among the top 10 foreign exchange earners for India.1
  • The Leather industry in India stands at $17.85 Bn (Exports – $5.85 Bn, Domestic Market – $12 Bn). The exports from April-Jan 2018-19 are recorded as $4750.62 Mn.2
  • Export of different categories of Footwear (leather & non-leather and components) holds a major share of about 50.34%.3
  • The Leather industry in India is an employment-focused industry, providing jobs to about 4.42 Mn people.4 
  • India is the 2nd largest producer of footwear, 2nd largest exporter of Leather Garments, the 5th largest exporter of Leather Goods and 3rd Largest Exporter of Saddlery and Harness items.5
  • Opportunity to set-up export units: Exports are projected to reach $9.0 Bn by 2020, from the present level of $5.85 Bn. India has trade agreements with Japan, Korea, ASEAN, Chile etc., and is negotiating Free Trade Agreement with the European Union, Australia etc.
  • Opportunity to tap the huge domestic market in India: The domestic market is expected to reach $18 Bn by 2020.
  • Comparative advantages exist in production cost and labour costs as compared to other major manufacturing countries.
  • Skilled/trained manpower is available for a new production unit or existing production unit.
  • Strong Raw Material Base
  1. India is endowed with 21% 6 of the world’s cattle and buffalo and 11% of the world’s goat and sheep population.
  2. India produces 3 bn sq. feet of leather on an annual basis.7
  •  The Leather industry in India comprises of major segments namely footwear, finished leather, leather goods, leather garments, footwear components, saddlery and harness. All these segments have high growth potential.
  • Per capita consumption of footwear in India projected to increase up to 4 pairs and total domestic consumption is expected to reach up to 5 bn pairs by 2020.
  • Great opportunity to set-up manufacturing facility of footwear components, considering increasing demand for fashion footwear in India.
  • High growth potential for exports
  • The ready availability of leather
  • The abundance of essential raw materials
  • Rapid strides in the areas of capacity modernisation and expansion
  • Skill development and environment management
  • Favourable government policies
  • Additional steps have been taken to increase the export of leather and leather products:
    1. About 2% across the board enhancement of duty credit scrip under Merchandise Exports from India Scheme (MEIS) for shipments made from 1 November 2017
    2. GST concessions for leather industry items –
      • Finished leather from 12% to 5%,
      • Certain leather chemicals, leather goods, leather garments and saddlery items from 28% to 18%,
      • Common Effluent Treatment Plants (CETPs) from 18% to 12%,
      • Job work from 18% to 5% Footwear from 18% to 5% 8
  • Leather products manufacturing is allowed 100% FDI through automatic route.
  • Government of India has allowed 100% FDI in single-brand retailing in India, with a clause of 30% mandatory local sourcing.9 
  • The Leather industry in India is de-licensed, facilitating expansion on modern lines with state-of-the-art machinery and equipment.
  • Under the Leather Technology, innovative and environmental issues sub-scheme of Indian Leather Development Programme (ILDP), following assistance is provided:
    • Up to 50% of the project cost with a ceiling of $7.69 Mn for upgradation /installation of Common Effluent Treatment Plants (CETPs)
    • Addressing the environmental pollution caused by leather units
    • Solid waste management through environmental workshops 11
  • Integrated Development of Leather Sector (IDLS) sub-scheme of ILDP, 30% grant is provided on the cost of plant and machinery for Micro and Small units and 20% for other units, with a ceiling of $0.307 Mn for each product line.
  • Mega Leather Cluster (MLC) sub-scheme of ILDP, 50% grant with a ceiling of $19.23 Mn based on size is provided. This is mainly for the establishment of Mega Leather Clusters to boost infrastructure facility and support services for production and export.
  • Human Resource Development (HRD) sub-scheme: An assistance for Placement Linked Skill Development training to unemployed persons is provided –$230 per person, for skill up-gradation training to employed workers- $76 per employee and for training of trainers –$3,076 per person. The Footwear Design and Development Institute (FDDI) has established itself as the premier training institute for the provision of skilled manpower in the leather industry. It has 55 training centres across India including eight branches. Another 4 branches are being set up.12 About 25,643 persons have been trained under primary skill development training programme during 2018-19. 13
  • Mega Leather, Footwear and Accessories Cluster (MLFAC) sub-scheme: MLFAC provides infrastructure support to the leather, footwear and accessories sector. Graded assistance is provided up to 50% of the eligible project cost, excluding cost of land with Government assistance being limited to $19 Mn.
  • Leather Technology, Innovation and Environmental sub-scheme: The help is provided for upgradation/installation of Common Effluent Treatment Plants (CETPs) @ 70% of the project cost. The sub-scheme also offers support to national level sectoral industry council/ association and support for preparation of vision document for Leather Footwear and Accessories Sector.
  • Promotion of Indian Brands in Leather, Footwear and Accessories sub-scheme: Eligible units are approved for Brand Promotion. Government assistance is limited to 50% of total project cost subject to a limit of $461,538 for each brand, annually for 3 years.
  • Additional Employment Incentive for Leather, Footwear and Accessories Sector scheme: Employers contribute 3.67% to employees provident fund for all working in the leather, footwear and accessories sector.  The employees are enrolled in Employees' Provident Fund Organization (EPFO) for first 3 years of their employment.

As per the Doing Business 2019, World Bank, India is ranked 77. Many initiatives under National Trade Facilitation Action Plan (2017-2020) have upgraded the productivity of cross-border trade, reducing border and documentary compliance time for both exports and imports. 14
•    The National Manufacturing Policy identifies leather as a special focus sector, for growth and employment generation. The policy aims at a GDP of 25% along with a creation of 100 mn jobs in all sectors by the year 2025. 15
•    Presence of huge production centres in the form of Mega Leather Clusters (MLC) with all required infrastructure, where investors can set-up one of these MLCs.
As on July 2018, special purpose vehicle at Jalandhar, under the Mega Leather Cluster scheme is under consideration.16

Project Approved
•    Kothapatnam Village, Kota Mandal, Andhra Pradesh (Area: 537 acres)
Project under consideration
•    IMT Rajkot, Mewat, Haryana (Area: 105 acres)
•    Sandila Industrial Area in Hardoi district & Ramaipur in Kanpur district. (Area: 150 acres) 17


  • Apache Group (Taiwan), Nellore, Andhra Pradesh
  • Feng Tay Shoes (Taiwan), Cheyyar, Tamil Nadu
  • Itares (Italy), Ambur, Tamil Nadu
  • Council for Leather Exports (CLE)
  • Central Leather Research Institute (CLRI)
  • Footwear Design and Development Institute (FDDI)
  • National Institute of Fashion Technology (NIFT)
  • Central Footwear Training Institute (CFTI)
  • Indian Footwear, Leather & Accessories Development Programme (IFLADP), a special package for employment generation in the Leather and footwear industry has been launched in December 2017. The approved expenditure for this is $371 Mn from 2017-18 to 2019-20. Under the programme, 4 projects have been approved with a total outlay of $15 Mn. This is to facilitate upgradation of infrastructure, job creation and environmental sustainability in Tamil Nadu.17 
  • In-principal approval for the mega leather cluster in West Bengal with employment potential for around 7000 people and an investment of up to $64 Mn. Under the scheme, a total of 9 projects for Common Effluent Treatment Plant upgradation, with a gross value of $67 Mn and government assistance of $46 Mn have already been approved and are under implementation.
  • During 2017-18, primary skill development training has been provided to 94,231 unemployed persons in the Leather & footwear industry and of them, 71,125 trainees have been provided placement.18
  1. Press Information Bureau, Government of India, Ministry of Commerce & Industry, Potential for Growth of Leather Based Industries, http://pib.nic.in/newsite/PrintRelease.aspx?relid=95785 accessed on 27 May 2019
  2. Council for leather exports, Export Performance of Leather and Leather Products from India, http://leatherindia.org/category/exports/ accessed on 27 May 2019
  3. Council for leather exports, Export Performance of Leather and Leather Products from India, http://leatherindia.org/category/exports/ accessed on 27 May 2019
  4. Council for leather exports, Industry at a glance, http://leatherindia.org/industry-at-a-glance/ accessed on 27 May 2019
  5. Press Information Bureau Government of India Ministry of Commerce & Industry, Growth of Leather Industry, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186811 accessed on 27 May 2019
  6. Ministry of Commerce & Industry, Potential for growth of leather-based industries, https://dipp.gov.in/sites/default/files/ru4501.pdf accessed on 27 May 2019
  7. Council for leather exports, Indian Leather Industry, http://leatherindia.org/indian-leather-industry/ accessed on 27 May 2019
  8. Department for Promotion of Industry and Internal Trade, Promotion of leather industries, https://dipp.gov.in/sites/default/files/lu_4316.pdf accessed on 27 May 2019
  9. EY reports, Footwear (India) – Industry Overview – FY18, accessed on 27 May 2019
  10. EY reports, Footwear (India) – Industry Overview – FY18, accessed on 27 May 2019
  11. EY reports, Footwear (India) – Industry Overview – FY18, accessed on 27 May 2019
  12. Press Information Bureau, Ministry of Commerce & Industry, Year End Review 2018- Ministry of Commerce & Industry, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186255 accessed on 27 May 2019
  13. Ministry of Commerce & Industry, Statement of Activities 2018-19, https://commerce.gov.in/writereaddata/uploadedfile/MOC_636850524269073529_Statement_of_Activities_2018-19.pdf accessed on 27 May 2019
  14. Planning Commission, The Manufacturing Plan, http://www.planningcommission.nic.in/aboutus/committee/strgrp12/str_manu2703.pdf accessed on 27 May 2019
  15. Make in India, Achievement Report – Leather sector - 30 October 2018, accessed on 27 May 2019
  16. Government of Uttar Pradesh NRI Department, Mega Leather Cluster (MLC)Project, http://www.upnri.com/mega-leather-cluster-project.htm accessed on 27 May 2019
  17. Press Information Bureau - Ministry of Commerce & Industry, Four Projects Approved in Tamil Nadu under IFLADP, http://pib.nic.in/newsite/PrintRelease.aspx?relid=184110 accessed on 27 May 2019
  18. Press Information Bureau, Achievements of Ministry of Commerce and Industry 2018, https://pibindia.wordpress.com/2018/12/12/achievements-of-ministry-of-commerce-industry-during-2018/ accessed on 27 May 2019
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