As per officially notified DGCI &S monthly export data, export of leather and leather products for the first eleven months of the current year i.e., April-February 2011-12 touched USD 4508.21 million as against the export of USD 3558.23 million in the corresponding period last year, registering a positive growth of 27% aided by improved demand. During the period, the rupee continued to depreciate from September 2011 on year on year basis on global economic conditions. Thence, the fall in rupee had accelerated the growth in Indian leather exports to 33% at Rs 215064.37 million during April-February 2011-12.

In eleven months ended February 2012, Germany topped with 15% of the India's leather product exports, followed by UK 11.2 % and Italy 11 %. These three countries together accounts for nearly 38% of India's total leather products. Among the major countries, except Germany and USA, the other countries lost their market share in the Indian leather exports. UK lost its market share by 150 bps, Italy by almost 53 bps, France by 80 bps, Hong Kong by almost 110 bps and Spain by 14 bps compared to the corresponding period of last year due to Euro zone debt crisis and gloomy global economic outlook.

During the period, leather footwear contributed about 36% to the total exports, Leather goods about 22% and finished leather about 21%. Besides, leather garments accounted 22%, footwear components 6%, saddlery &harness segment around 2% and non leather footwear products remaining 2%.

Leather footwear exports revenues grew by 21% to USD 1602.67 million, leather goods exports grew by 31% to USD 992.8 million, finished leather exports rose by 24% to Rs 930.16 million. Similarly, exports of leather garments increased by 41% to Rs 546.89 million, footwear components increased by 27% to Rs 263.17 million, saddlery & harness grew by 29% to Rs 100.68 million and non-leather footwear exports grew by 40% to Rs 71.88 million.

The Indian leather & leather products is in demand for its quality, finish and designs. Further, the demand is expected to grow considering the change in life style and affordability for the Indian leather industry. Players that regularly review their product range and adapt to changing requirements of the customers are better placed. Value engineering, improving productivity & capacity besides reducing operating cost are the key.

The on going sovereign debt crisis in EU in general and Spain, Greece etc can depress the growth of the Indian leather exports into these regions in the short to medium term. Relatively, Rupee has depreciated by mere 9.5% against Euro, but at much steeper 25.7% against US dollar on y-o-y basis through 25^th August 2012. But with sizeable share of Indian leather exports going to Euro region, the rupee depreciation has also not benefited much. Players who are able to step up exports to United States, or exports denominated in US$ are relatively better placed.