Leather products are categorized into segments such as Tanning, Footwear, Leather Garments, and Goods & Accessories Sector including Saddlery & Harness. India is second largest producer in both leather footwear and leather garments sectors while in exports the Country stands third in leather garments and fifth in leather goods & accessories sectors.

During the period April-September 2011, Indian leather exports increased by 5% to USD 1772.27 million on ramp up in exports of leather goods and saddlery items by 11% to USD 413.26 million accompanied by rise in leather garments exports by 8% to USD 199.07 million amid increase in Leather footwear exports by 5% to USD 682.65 million. The other segments such as footwear components and non-leather footwear exports crashed by 6% to USD 110 million and 16% to USD 5.77 million respectively.

India after easing by 5.5% to USD 3400.97 million in their leather & leather products exports for the FY2009-10, it increased by 13% to USD 3844.86 million in FY 2010-11, in which, Germany topped with 14% of the India's leather product exports, followed by UK 13% and Italy 12%. These three countries together accounts for nearly 39% of India's total leather products.

The aggregate of 17 leather companies clocked the revenue growth of 11% to RS 1167 crore for the quarter ended September 2011.The operating profit margins grew by 18 bps to 12% dragging up the operating profit by 13% to Rs 140 crore. Further on accounting other income flat at Rs 6 crore the PBIDT grew by 6% to Rs 146 crore. Besides, spike in interest costs by 43% to Rs 33 crore and increase in depreciation costs by 12% to Rs 28 crore facilitated the PBT to rise by 4% to Rs 85 crore. Finally, with the increase in provision for taxation by 13% to Rs 26 crore the net profit remained flat at Rs 59 crore.

The demand for the Indian leather & leather products is increasing rapidly for its quality, finish and designs. With technology and quality of the leather products improving year after year, Indian leather industry is stamping its class and expertise in the global leather sector trade and increasing its market share in Germany, UK, and Italy etc.

The growth in the sector is aided by the capacity expansion and modernization efforts of the private industry and the Government of India's encouraging policy measures. Ministry of finance on September 23, 2011 has done marginal reductions in the Duty Drawback Rates (DBK) on some leather items while it has increased the cap values for most of the items on November 1, 2011, which will be beneficial to the leather industry in the future.

Sharp depreciation of Indian rupee will also ring in gains for leather and leather product exporters. But the Euro debt crisis and sluggish US economic growth together can dampen demand growth, which is a cause for concern.