In the world of international trade, the trajectory of finished leather exports from India has been a subject of scrutiny and concern over the past eight years. Delving into the data, we aim to dissect the year-on-year variations, evaluate the current landscape, and offer insights into potential future trends.
Unraveling the Decline: Exploring Contributing Factors
Let’s address the pressing question: What factors might be contributing to the steady decline in finished leather exports from India?
Insights from Industry Experts
In a recent dialogue with seven prominent finished leather manufacturers and exporters, several key reasons surfaced:
a) Shift Towards Non-Leather Alternatives: An increasing preference for non-leather materials among consumers has been noted, posing a challenge to the leather industry’s market share.
b) Stringent Environmental Regulations: Compliance with rigorous environmental standards presents a significant hurdle for leather manufacturers, leading to operational complexities and cost implications.
c) Stagnant Pricing Dynamics: Despite efforts to enhance product quality and innovation, there has been minimal improvement in pricing dynamics from the customer’s perspective, limiting profit margins for exporters.
d) Impact of the COVID-19 Pandemic: The disruptive effects of the COVID-19 pandemic have reverberated across global supply chains, disrupting production and dampening consumer demand for luxury goods like finished leather products.
e) Escalating Energy Prices: The escalation of energy prices, particularly in European nations following the Russian-Ukraine conflict, has escalated production costs, further straining export competitiveness.
f) Emerging Market Competitors: Bangladesh has emerged as a formidable competitor in the international leather market, attracting customers with competitive pricing and streamlined supply chains, thus diverting demand away from India.
Industry Perspectives and Insights
Reflecting on the observations, industry stalwarts offer diverse perspectives:
Quotes that the closure of American companies sourcing finished leather from India for upper production could be a contributing factor to the decline witnessed post-2013–14.
Mr. Aqueel Ahmed, Former Chairman of the Council for Leather Exports – India,
Challenges the status quo by highlighting the need for regulatory reforms and modernization within the industry. He advocates for updating archaic practices to foster growth and competitiveness.
Mr. Kaul, COO at AVANTI Leather Ltd,
Assessing Current Trends
Amidst the challenges, there are glimpses of resilience within the industry. In the fiscal year 2021–22, finished leather exports experienced a notable uptick of 15%. Moreover, preliminary data for 2022–23 suggests a modest growth trajectory, indicating potential signs of recovery.
Predicting Future Trajectories
Looking ahead, the trajectory of finished leather exports hinges on multifaceted dynamics. As sustainability becomes a focal point for consumers, there is a pressing need for the industry to showcase the intrinsic value of leather products, leveraging its durability, and timeless appeal.
Conclusion
In conclusion, the decline in finished leather exports from India is a complex interplay of global market dynamics, regulatory challenges, and shifting consumer preferences. As the industry navigates through turbulent waters, strategic adaptation, innovation, and advocacy for sustainability will be pivotal in charting a resilient path forward.
Data source : – https://leatherindia.org
