Leather footwear segment by and large occupied the highest market share in the total exports accounting to 38% followed by finished leather and leather goods & saddlery items with 22% each amid leather garments accounted to 11%, footwear components such as show uppers, soles, etc constituted about 7% and non leather footwear segment accounted negligible market share to the total exports.

Both leather garments and leather goods & saddlery products which form a significant segments of the leather industry India, have shown an increase in their exports by notable 8% in rupee terms and 14% in USD value terms. Finished leather products exports though grew by flat 1% in rupee terms but rose 7% in USD value terms where as leather footwear, the engine of growth for the entire sector has shown a growth in its exports by 4% in rupee terms and 10% in USD value terms. However, the footwear components and non –leather footwear products has shown a degrowth in the exports. The footwear components exports reduced by 6% in rupee terms and inch down by 1% in USD value terms. Non-leather footwear exports dwindled by 16% in rupee terms while shrinked by 11% in USD value terms.

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 on going sovereign debt crisis in UK, Spain and Italy (accounting about 30% to the total exports) might be threat to the Indian leather exports in the coming future. But, thanks to the recovery in US economy, which might show some positive impact in the industry. Moreover, the strong dollar appreciation would help the industry to realize better earnings for their products. Apart from this, the sales to over seas market are expected to recover ahead on eve of Christmas and New Year 2012.

Stiff competition from China, which uses low cost pig leather remain a concern. With cost of production going up, and sluggish demand on the other, Indian leather and leather product sector remains handicapped. On the positive side, the sharp depreciation of Indian rupee has added sheen to the global competitiveness of the domestic players. Also, the players are moving up the value chain, and tapping the strong growth in domestic market as well. In this background, the players who are enriching their product and geographical mix are better placed.