Demonetisation impacts Indian leather industry
20/12/2016
Assocham has spoken with representatives from approximately 100 tanneries in India’s major leather clusters: Agra, Chennai, Kanpur and Kolkata.
The survey found that the demonetisation is causing severe difficulties for the India leather industry as it has prevented payments for raw materials, transportation and worker salaries.
The majority of the tanneries that participated in the survey revealed that their production was down more than 60%. This is being caused by a lack of animal hides, with tanneries in Chennai reporting a 60% drop in the availability of raw materials, while the cluster in Agra, Kanpur and Kolkata have recorded a decline of more than 75% in hide deliveries.
It is also affecting the industry’s workforce, with many employees not being paid on time and some tanneries having to lay off staff due to lack of funds.
Nearly two thirds of the tanneries contacted said they were no longer taking export orders in the wake of demonetisation as they will not be able to complete orders on time. They suspect it will take the industry between 9 and 12 months to fully recover.
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