India ranks second largest among the Footwear producing nations next to China. Over the last five years this sector has maintained an average growth rate of 25% in the world. Inspite of this growth rate, our share in the global Footwear market accounts for only 0.8%. The main competitor to us in the international market is China, which is well known for providing the consumer better value for money i.e by cheaper goods.
Footwear industry in India is predominantly a cottage industry. The total estimated production is around 500 million pairs of Footwear. Out of this, nearly 80% is from cottage (hand made) and small scale sector. Till 1982 the production in India was generally of conventional shoes but in 1982 the sports shoes production using latest imported machines from Italy was started. Companies like Action, Diamond and Alishan were some of the pioneers in the field who brought and utilised Auto Galli machines for the first time in India.
This industry was formerly a craft industry using mainly leather as a soling and upper material but now it has adopted a light engineering approach taking advantage of new technologies in the form of material, process and machineries.
Estimated Production Capacity:
Product CapacityLeather:
Hides pieces 65 million Skins pieces 170 million
Leather products, Footwear & Footwear Components:
Shoes 121 million pairs Leather Shoe Uppers 122 million pairs Industrial Gloves 52 million pieces Saddlery 0.10 million pieces. --------------------------------------------------- Source: CLRI
Export Performance:
Over the last two decades India has been performing well in the International market. The Footwear exports from India are winning the confidence of customers abroad but it has not been able to achieve the position which it should have. The top ten international players in the Footwear market are China, Commonwealth of Independent States(CIS)[Russia, Kazakistan...all States formerly USSR], South Korea, Brazil, Italy, Taiwan, Japan, Thailand, USA and Indonesia.
Domestic Market:
The domestic market for Footwear industry is very price sensitive and has been steadily growing over the years. One of the main reasons for the growth in this sector is the large population of India of more than 100 crores, the total size of market is estimated at 800 million pairs. There is a huge demand supply gap to around 300 million pairs with the estimated production of over 500 million pairs. The estimated demand in India of 800 million pairs represents less than a pair per capita. Major part of the demand is met by un-organised, informal, small scale sector and cottage sector. Branded shoes account for only less than 20% of the entire market and only less than 1% of the shoes sell for Rs.500 or more.
Raw Material Base:
Their exists a large raw-material base. This is on account of the following:
Cattle : 212 million Buffaloes : 96 million Goat : 144 million Sheep : 53 millionAccording to the latest census India ranks first among the major livestock holding countries in the world. In respect of Sheep with 53 million Sheep it claims the 6th position in the world.
The annual availability of 65 million pieces hides and 170 million pieces of skins is the main strength of the industry. Some of the goat, calf and sheep skins available in India are unique products commanding a good market.
Manpower:
There is an abundance of traditional skills in training, finishing and manufacturing downstream products. The wage rates are relatively low as compared to the rest of the world. These two factors give a comparative advantage to India. There is abundance of skilled and semi skilled labour. The added strength is the existence of well equipped training institutes imparting training in various facets to manufacture of leather and leather products. These apart, Indian traditional skills in embroidery, handcrafting etc. are areas of strength.
The leather industry has tremendous potential for employment generation. Direct and indirect employment of the industry is about 2.5 million persons, majority of whom are women and from weaker sections of the society.
Export Performance:
(value in Million US$) Category April-Feb1999-2000 April-Feb2000-2001 % Variation Finished Leather 218.53 339.48 35.35 Leather Footwear 342.50 348.96 1.89 Footwear Components 198.90 219.81 10.51 Leather Garments 323.54 429.34 32.70 Leather Goods 354.49 410.23 15.72 Saddlery and Harness 31.28 39.97 27.84 Non-leather Footwear 13.01 16.48 26.65 Total 1482.23 1804.27 21.73 ---------------------------------------------------------------------- Source: DGCI & S, Calcutta.
As can be seen from the above table the exports of leather have witnessed a growth of around 22% during the last one year. The value of exports have been around 1800 million US$.
Export Direction from India:
(Value in million US$)
Country 1999-2000 Share in total exports in 1999-2000. Germany 296.40 18.81% UK 266.73 16.92% USA 251.71 15.97% Italy 162.82 10.33% France 83.91 5.32% Spain 66.79 4.24% Hong Kong 53.30 3.38% Others 394.46 25.02% Total 1576.12 100.00% -------------------------------------------------------------------- Source: DGCI & S, Calcutta.The top 4 countries which together account for around 60% of the total exports of leather and leather products are Germany, UK, USA & Italy.
As can be seen from the above table, the exports of finished leather are worth about 440 million US$. Efforts should be made to convert these exports into value added leather footwear, Leather Garments and other leather goods.