India is targeting export revenues of $7 billion for its leather and leather products in five years’ time, with footwear and components rising to $4 billion from $1 billion, as part of a new “Road-Map of the Indian Leather Industry”compiled by India’s Council for Leather Exports (CLE). The general philosophy is to stimulate higher foreign sales of finished products while filling the gaps in the supply chain.

The latest statistics indicate a growing momentum in finished products anyhow. In the 12-month period ended last March, India’s total exports of leather and leather products were up by 8 percent to $2,694.6 million, but exports of footwear grew at a more rapid pace of 19.6 percent to $786.8 million, while those of shoe components were down by 0.1 percent to $179 million. While exports of finished leather declined by 0.3 percent to $606 million, those of leathergoods rose by 10.8 percent to $649.1 million, and those of saddlery and harness went up by 23.8 percent to $76.4 million. Exports of non-leather footwear went down by 6.8 percent to $68.7 million.

India has the capacity to produce 909 million pairs of leather shoes, one billion pairs of non-leather shoes and 100 million pairs of uppers per year. Based on CLE’s new “Road-Map,” $2.4 billion out of the $4 billion worth of annual exports planned by 2010 are to be generated through organic growth by the industry in its present state. The balance would come from 7.5 million pairs of daily capacity to be added in India over the next few years, particularly in the country’s special economic zones and in the industrial clusters of Chennai, Agra, Kampur and Calcutta, where the road and power infrastructure is being upgraded, with help from public authorities.

These and other aspects of the new «”Road-Map” were recently presented to the Indian leather industry and to the government by Ahmed Rafeeque, chairman of Farida and of the CLE, and by its new executive director, Elangovan Kamalakannen, who joined the 2,500-member association seven months ago after occupying important positions in India. He was most recently deputy chairman of the Chennai Port Authority and managing director of the Kerala Tourism Development Corporation.

In 2005, India launched an integrated leather development scheme to upgrade technologies in all segments of the leather industry, with funds of Rs290 crore (€52m-$63m). The plan stemmed from a broader program of upgrading the industrial infrastructure that covers the sectors of car components, textiles, chemicals, foundries, leather and rubber. A total of 26 proposals involving investments of Rs 1,766 crore (€318m-$382m) have already been approved for funding with a central grant of Rs952 crore (€172m-$206m).

The leather sector is the dominant one on the list of 20 manufacturing sectors with growth potential drawn up in the country’s new National Strategy for Manufacturing, and it crosses over through several other of these sectors, such as textiles and garments, automotive components, chemicals and petrochemicals.

The Indian economy is booming, on the other hand. For the overall manufacturing sector of India, the annual growth rate has risen from 5 percent in 2000-01 to 9 percent in 2005-06, and it currently running at about 10.4 percent. India’s goal, as was outlined by Shri Kamal Nath, minister of commerce and industry, is to expand the share of manufacturing in the gross domestic product from 17 percent to 25 percent by 2012.

Anyhow, India is already the world’s second-largest shoe producer after China, and the present European anti-dumping duties on China and Vietnam have turned more attention to this important low-cost source of footwear. For these reasons, India was selected as the first “focus country” at last month’s international Expo Riva Schuh show on Lake Garda in Italy, where executives of CLE and diplomatic representatives of the country stressed the fact that it has the world’s largest livestock and that the availability of cheap labor is plentiful.

Price Waterhouse Coopers has ranked India as the country with the largest available working population in the world in the important 15-45-year age group. At a nice party with Indian food organized by the far after the presentation, Indian officials admitted that the country’s labor force is not as productive as the Chinese, but said they were making efforts to train it properly, and that in any case the clients should also consider the human and «spiritual» aspect of the issue, which is very important in India.

The Indian government continues to support many of the industry’s export promotion initiatives, funding one-third of the related expenses. In addition to its growing presence at various international trade shows, CLE set up an “Italian desk” in Milan at the beginning of this year to try to attract Italian investment and know-how to the Indian leather, footwear and leathergoods industry.

CLE’s Italian office is run by Mario Pucci, an Italian industry veteran who recently retired as export manager of Assomac, the association of Italian suppliers of shoe manufacturing machinery and equipment. A dozen Italian companies had already made contact with Indian firms following this initiative.

As an additional incentive for foreign investment, Indian officials point out that India’s national consumption of footwear is bound to increase sharply in the future, creating major opportunities for Italian brands. Due to its large population of 1.2 billion people, the Indian market is already the third-largest one in the world, but per capita consumption is expected to rise from 1.6 to 3-4 pairs per year by 2010, creating a market worth €1.7 billion annually.

Trade missions to India have already been organized or are being organized by shoe manufacturers from Italy, Spain and Portugal. However, officials feel that many decisions on cooperation with Indian manufacturers will depend on the outcome of the current debate in Brussels on trade protection from China and Vietnam.