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The Maharashtra government’s decision to ban beef is set to affect the leather sector in Tamil Nadu, which sources 40 per cent of bull hides produced in Maharashtra. According to experts, the ban will increase the price of leather products and bring down production, as the domestic market won’t be able to meet the demand and importing won’t be viable.
M Rafeeque Ahmed, president, All India Skin and Hide Tanners and Merchants Association, said Maharashtra used to supply nearly two million leather sheets a year at an all-India level.
“Not only has the cost of sourcing gone up nearly five per cent, if Maharastra is not going to supply, our production will also come down,” said Ahmeed, adding that companies in Tamil Nadu were currently paying around Rs 800 per hide.
He noted that after Kolkata and Punjab, the best hides come from Maharastra. Tamil Nadu’s leather industry used to source hides from Aurangabad, Kalyan (near Mumbai), and other places.
The development comes at a time the industry is reviving. “Now things are looking good and we will close the fiscal with 15 per cent growth,” said Ahmed.
“Some Chinese cities that were traditionally in the leather industry are now moving towards electronics. Those orders are now moving to India. The challenge is India’s production capacity and quality,” Ahmed noted.
A ‘focus sector’ in the Make in India programme, the leather sector is expected to touch $27 billion in the next five years from the current $12 billion. Tamil Nadu accounts for 40-45 per cent of exports.
The sector has recorded a compound annual growth rate of 14.77 per cent in the past five years. According to Ahmed, the target is to increase the value of export to $15 billion and the domestic market turnover to $12 billion.
Exports of leather and leather products during the first eight months of FY15 touched $4.45 billion against $3.8 billion during April-November 2013, an increase of 17 per cent.
