Over the last twelve months the Italian and Indian companies in the leather trade have started a number of joint venture and partnership arrangements in India and the Indian Government is now investing heavily to encourage inward investment in partnerships in the leather sector. An Indian delegation is now readying itself to visit Tuscany in late September, 2005.

Three delegations have so far visited India and as a result of this two footwear component JV’s and one tannery JV have been established. Now India is establishing two “footwear parks” to encourage activity of a similar nature elsewhere. One of these parks will be established in Chennai and the other in the footwear region of greater Agra. Both will be completed by mid-2005 and the infrastructure for each will include bonded warehouse arrangements, a design centre and a testing centre.

In a press conference at Lineapelle, presented jointly by The Indian Council for Leather Exports and the Italian tannery machinery industry association ASSOMAC, presentations emphasised the potential growth for domestic demand for footwear as consumption moves from the current 1.7 pairs per annum to 2.5 over the next few years. This will bring domestic demand to about 3 billion pairs compared with a current production of 1.8 billion.

India’s large, low-cost labour pool, and its domestic raw material supply were also highlighted. Key pointers on the leather and footwear trade presented were as follows:

◦ 21% of world cattle & buffalo; 11% of world goat & sheep population

◦ Source for 10% global leather requirement

◦ Strong production base - Annual production value $4 billion; Annual export value $2 billion

◦ Export growth CAGR 6.89% (1999-2003) - Global share

  2.32%

◦ Promising inflow of technology and FDI (Example: JV     

  between Italian         

        tannery Conceria Virginia and Forward

  Group) 

° Leather produced – 2 billion square feet per annum

◦ Second largest producer - 14% of world footwear

◦ Production: 1848 million pairs (leather footwear (LF) 888 million; non leather footwear (NLF) 960 million)
 - Men 64%; Women 20%; Children 16%

◦ Export: 77 million pairs (LF 92%; NLF 8%)

      ◦ Domestic Consumption: 1771 million pairs (LF 46%; NLF    

        54%)
        - Per capita consumption: less than 2 pairs

◦ Export growth CAGR 5.74% (1999-2003)

◦ Major export markets: UK, USA, Germany, Italy, France,

  Netherlands, Canada, UAE, Spain, Australia etc.

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