To decrease the cost competitiveness of Chinese leather products, Indian exporters have turned to research and development to produce lower grade cattle skins that could compete with Chinese export prices.

The Council for Leather Exports (CLE) has initiated work with Chennai-based Central Leather Research Institute to develop low-grade leather. It would be used predominantly for the production of leather jackets, according to the CLE Chairman, S.S. Kumar.

Chinese products are made from pig skins and sold at almost half the cost of Indian products. Among big volume items the Chinese sell leather jackets at around $30 each on the export market, against Indian products at $40 or more. China’s cost-effectiveness is due to the use of cheaper pig-skin, seldom practised in India for religious reasons. Kumar said the low-grade leather being developed will be able to match Chinese pig leather in prices without compromising quality.

Industry estimates value the Indian leather industry at $4 billion. It produces approximately 18 million square feet of leather and earns $2 billion in exports per year. Despite this, India only has about 2% share in the $40 billion global footwear market. China, on the other hand, commands 20%.

India does, however, have a strong potential if it can battle China’s prices. With over 21% of the world cattle and buffalo population and 10% of the world sheep and goat population, it holds a very strong raw material base in terms of cattle heads. The liberal import policy for raw hides and skins makes India a major tanning centre and the country already is the source of over 10% of global leather supply.

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