In the face of geopolitical uncertainties and economic downturn fears in the US and Europe, the leather goods industry in West Bengal stands resilient, with projections indicating a robust growth of 10 per cent in the fiscal year ending March 2024. This optimism comes from a senior official, reflecting the industry’s adaptability and agility amidst challenging global landscapes.
The Indian Leather Products Association (ILPA) sheds light on the shifting dynamics of global sourcing strategies. The transition from a ‘China First’ approach to a ‘China-Plus-One’ model has emerged as a significant driver for the surge in demand for Indian leather goods, despite prevailing headwinds.
President of ILPA, A M Kulkarni, expresses confidence in Bengal’s growth trajectory, anticipating a double-digit year-on-year expansion in FY’24. Kulkarni notes that exports from the state, which amounted to Rs 5,000 crore in 2022-23, witnessed a commendable 10 per cent increase.
This growth is attributed chiefly to the ‘China plus one’ strategy embraced by global leather brands. By diversifying their sourcing locations and incorporating India into their supply chains, these brands aim to mitigate risks and optimize costs.
India’s major leather clusters, spanning Tamil Nadu, Uttar Pradesh, Punjab, Delhi, Maharashtra, Haryana, and West Bengal, play pivotal roles in fulfilling this escalating demand. Rajarshi Dey, vice-president of ILPA, emphasizes India’s ascension as a primary beneficiary of the shifting demand dynamics, driven by factors such as escalating manufacturing labor costs in China over the past decade.
Dey points out that India’s competitive advantage lies in its cost-effective manufacturing ecosystem and skilled workforce, making it an attractive destination for global brands seeking alternative sourcing hubs.
Notably, ILPA members are key suppliers to renowned global brands including Porsche, Gucci, Prada, MARC, Zara, Mango, Diesel, Police, and Max Mara, underscoring India’s significance in the global leather market.
Meanwhile, the burgeoning West Bengal leather industry is facing infrastructural challenges amidst its growth trajectory. With an increasing demand for land to accommodate expanding units and attract new entrants, stakeholders are urging the state government to allocate additional land.
“We are in pursuit of approximately 20 acres of land to facilitate the expansion of existing units and accommodate new entrants from other states. The existing leather park at Bantala near Kolkata has reached its full capacity. Therefore, we urge the state government to identify suitable land closer to the city, given the labor-intensive nature of the leather industry,”
Says Kulkarni.
In conclusion, despite prevailing global uncertainties, Bengal’s leather industry stands poised for significant growth in FY’24, thanks to shifting sourcing strategies and its inherent strengths. However, addressing infrastructural needs, particularly land allocation, remains crucial for sustaining this growth trajectory and maximizing the industry’s potential.
