The Indian government decided on May 30 to impose a countrywide ban on the sale of beef cattle for slaughtering purposes across state and national borders, creating a storm in the country's leather and footwear industry, which generates annual revenues of $13 billion. It is also imposing a $200 fine for the ownership of a cow. Bowing to pressure from religious groups and Peta, the international animal welfare association, the central government said the measure was meant to prevent animal cruelty and illegal trade with smuggled animals.

Some states where the slaughter of cows is permitted are mounting a case against the central government. In Chennai, where several demonstrations have taken place over the issue in the last few days, the local courts granted a four-week stay on the application of the new rules. Aside from a possible exception for buffalos, the measures will probably become final, however, if the ruling Hindu nationalist BJP party wins the elections being held at the end of next month.

The killing of cows is already illegal in most of India's states because they are considered sacred by Hindus, who constitute the majority of the country's population. In most cases the local tanners use skins that are taken from cows after their natural death. However, there are many other reported cases in which the cattle is transported in overcrowded trucks and killed under cruel conditions.

Technically, the new governmental ban applies to the sale of cattle, especially at animal markets in the states where they are permitted, but not to the actual slaughter of the animals. Because of the new measures, Indian manufacturers of shoes, leathergoods and other finished products will probably tend to switch at least in part to leather imported from Bangladesh, which has a similar grain structure, as well as from other sources. A shortage of raw and finished leather from India would probably have an impact on leather prices, as India accounts for 15 percent of the world's cattle.

India is the world's second-largest footwear producer, and the local shoemakers depend on locally produced leather for more than half of their production. The industry has been very critical of other strong actions taken by the present government of Prime Minister Narendra Modi, which came to power three years ago, such as the demonetization of the rupee.

The new measures come after the release of new figures from India's Council for Leather Exports showing the ongoing decline in India's exports of leather products, which is apparently being compensated in part by a growing domestic market. Total exports of leather and leather products fell by 4.12 percent to US$5,170 million in the 11 months through last February, with a particularly big drop in European countries.

Exports of finished leather experienced the strongest decline, falling by 15.67 percent to $805.1 million. Exports of leather shoes went down by just 1.08 percent to $1,950 million, but exports of synthetic shoes rose by 7.7 percent to $302 million.