‘Honour contracts’ pleads CLE as India loses $1bn in leather orders
India’s leather sector has lost an estimated $1 billion in orders for export due to the global fallout from the cornonavirus, according to the country’s Council for Leather Exports.
Its chairman, Aqeel Ahmed Panaruna, stressed that buyers need to honour contracts that have been agreed so that raw materials and chemicals companies – and employees – can be paid.
He said: “We understand the closure of retail stores and consequent downsizing of orders by buyers. However, the buyers need to honour the business contracts which have been agreed.
"Future business contracts/negotiations can always be firmed up on mutually acceptable terms as cancellation of contracts will cause a massive loss to our industry and affect the livelihoods of thousands of workers who belong to economically weaker sections.”
The sector in India employs 4.42 million people and more than 90% of businesses are in the Micro Small and Medium Enterprises segment.
Mr Srinivasan of Prime International, Chennai added: “The tanneries today have stocks of raw materials both imported and domestic and also have lot of chemical inventories and this lockdown with a 50% cancellation of orders today will put every tannery in deep trouble.”
The lockdown also means tanneries and production units are all closed and export shipments lying ready are stuck.
Indian tanners called on buyers to act responsibly.
Mr Panaruna added: “The abrupt cancellation of export orders by overseas buyers is causing financial catastrophe to our exporters and rendering their employees jobless and hence buyers need to honour the contracts.
“The Indian leather, leather products and footwear industry (including components) takes this opportunity to re-affirm its commitment for further enhancement of trade ties with all buyers in the long term and wishes for a speedy return to normalcy in all countries.”
