With competition between Indian exporters for global contracts getting tougher, they are trying out innovative methods to attract customers. One such measure is reducing import duty on some goods sold to the western world.
Often, your love for fine luxury leather products ends up with you buying Louis Vuitton handbags, Clarks shoes or Burton suits, not knowing that some of the best leather goods available in the market are made in India. Today, India is one of the fastest-growing manufacturing centers for leather goods. In a country flooded with French and Italian brands, Indian leather products have carved its own niche in the global leather goods industry. Here's why.
Indian leather manufacturers have realized that they need to boost exports in order to maintain or increase their sales in key markets like the US, Japan, China and the rest of European countries. These days, majority of global buyers prefer buying products from developing countries like India. This is because Indian products are more affordable than those from developed countries. Indian exporters are also aware of the fact that in time, if they continue to expand their business aggressively, they will be able to command good returns on investment.
Imports of raw hide and garments have been regulated by the Indian Ministry of Foreign Affairs since nineteen seventies. Today, even machinery and transport equipment, appliances and chemicals are being imported to increase the competitiveness of the Indian leather manufacturers. According to a World Trade Organization study, Indian exporters enjoy the lowest level of customs duties against textile imports.
Apparel imported from India includes dresses, shawls, bed sheets, scarves, socks, shoes and gloves. A survey conducted in September 2021 by Leishman showed that Indian exporters are exporting apparel which is much cheaper than the price of leather. Moreover, Indian textiles have some of the best qualities in terms of quality, durability and color. They are also known for using the highest grade of leather and best manufacturing techniques. According to the Indian Ministry of External Affairs, in the last four years, the number of imports has increased by forty percent. In the same period, the number of exports has declined by twenty percent.
According to a report by IDFC, Indian exported merchandise dropped eleven percent in value in fiscal year 2021, as against the previous year. However, the fall was not as big as happened in other countries like China and Taiwan. The main reason for this decline is probably related to the entry of foreign exchange earners into the Indian leather sector. According to a study conducted by IDFC, Indian exporters are losing millions of dollars to foreign exchange earners who are buying leather products in Indian markets.
However, this problem can be tackled if Indian manufacturers will start investing more in research and development of new tanneries. This will help them overcome the problem of oversupply of raw materials. As of now, there are only three tanneries in the whole Indian countryside which can churn out leather products at profitable rates. These are located at Kolkata, Tamil Nadu and Gujarat. If Indian textile industry wants to grow, then investment in these three textile zones is must. As these are also major tourist destinations, they will get high traffic and this will help them increase their output and employment rate.
On the other hand, if Indian leather manufacturers are unable to invest in the research and development of better tanning processes, then they might have to face difficulties in coming up with innovative and high quality leather products. It is true that investing in research and development of new processes and equipment can take a lot of money, but the returns can be massive. As the demand for handmade goods from abroad will not decrease, the export earnings from this sector can augment as well. Thus, this small investment will help the small and budding textile manufacturers to expand and flourish. At the end of the day, they will be able to fulfill the dreams of their customers which is to produce the best quality products at the lowest possible prices.
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