The new chairman of Indias Council for Leather Exports, Rajendra Kumar Jalan, says the government’s views of the leather industry has changed and that all parties are now pushing forward together for leather production in the country.

Congratulations on your reappointment as chairman of CLE. What will your priorities be for India’s leather industry in the next few years? 

We want to take this industry forward, and for it to be fully inclusive and transparent. I am lucky to have a good team in the CLE executive committee, but we want to have all members involved in decision-making, rather than having just 50 people make decisions about policy. 

You have said India’s leather and footwear industry can achieve revenues of $47 billion by 2030, up from the current levels of around $17.3 billion. Is this an aspirational target?

No, it is not aspirational. We have come to this number after a lot of deliberation all over India and with professional help. We got this done with the help of a Big Four consultancy company, paying good money to have a report prepared. We have not plucked the number from thin air. We came to it systematically and methodically. It is dynamic and it could change, but we wanted to have something in place, something to go by.

What is the picture in 2024 of the performance and importance of the different market segments: footwear, accessories, apparel and others?

All of these segments have growth potential. India is marching ahead. Each state has its own data and there is a competition among the states to see which is best for business. There was a time when this might have been based on reports submitted on paper, but now everything goes through the system, through the portal. Before, everything was physical. Now it’s electronic, automatic. When we export we file it online and it is clear online. There is no human interface. This clarity has helped us; policies are emerging that are directly aimed at helping the leather industry.

How many tanneries are in operation in India now, how many people do they employ, and how does this compare with ten years ago?

We have 894 members who are registered as exporters of finished leather. That does not mean that they are the only ones who run tanneries. According to the CLRI, the number of tanneries in India is 2,000-plus, but my estimate is that around 10% of them have shut up shop following covid-19. This means we probably have 9% or 10% fewer tanneries than we did ten years ago. But we have a lot of untapped potential business. For example, we have calculated that sales of Indian finished leather in Vietnam, Indonesia and Mexico could bring in $27 million per year. Our leather footwear has untapped business worth $375 million per year in the US and our harness and saddlery products could achieve more than $100 million of untapped business as far as the US is concerned. We need to identify all of these untapped markets and work on them. With the US, I have been doing very big business there for the last 50 years, but we are still looking for the best way to penetrate that market. We are still looking for the answers. Lots of businesses in India don’t seem to want to cross the Atlantic. 

Which are the main countries from which you are importing raw material?

For raw hides and skins, the most recent figures show an annual spend of $3.1 million on material from Saudi Arabia, mostly sheep, and more than $2.3 million on, mostly, cow hides from Argentina. We also spent $1.4 million on material from New Zealand, mostly wool-on sheepskins, but some cow hides too. The figures also show a spend of $840,000 on material from Myanmar, which surprised me. In terms of finished leather, we have values of $37.25 million for material from Italy, $32.5 million from Thailand, $23.9 million from Turkey, $21.5 million from Vietnam, $19.9 million from Argentina, $18.5 million from China, $9.8 million from Egypt, $9.6 million from Nigeria, $8.9 million from Bangladesh and $8.7 million from Saudi Arabia. Part of this last set of figures could refer to wet blue as well; it’s not always clear from codes on the documents.

What are the main lessons about being a good CLE chairman that you learned last time around? 

Experience makes you a little bit introspective and allows you to see where you have gone wrong in the past. With experience, I have learned that it is important to try to take everyone together and to involve everyone. But at the same time it is clear to me that we should not deviate from the main goal, which is to be at par with the rest of the world and to keep working to become more and more sustainable.

What recent examples of environmental progress would you point to?

Sustainable processes and sustainable use of components are key. Our Central Leather Research Institute (CLRI) has developed several new ideas and intends to commercialise them very quickly. These include making recycled chrome from wet blue shaving dust. We have been talking with contacts in Switzerland about how to use this shaving dust. They have developed a technology for this but they are not ready to part with it. What they want to do is set up a factory for us here in India.

Personally, in my factory in northern India, we hardly use any electricity. The design means we have natural draughts for cooling and natural light. The little electricity we need for use on the shop floor all comes from solar power. We are also using olive-tanned leather for some customers in Australia.

We have to move towards sustainability and do it fast. We want sustainability across the entire supply chain; not just in the end product. The entire eco-system has to be right.

Is it a concern for you that this often adds cost?

If consumers want a sustainable product they will definitely pay. In the project in which we have used olive-tanned leather, the shoes would probably have cost $18 per pair, but with the olive-tanned leather, the price is $22. Even packaging can add cost. I have introduced FSC packaging, certified by the Forest Stewardship Council. Depending on the type of shoe and the size, this has added between 18 cents and 22 cents to the cost and we have passed that on to customers, with the customers gladly accepting it. But there is help available too. Some states in India, Uttar Pradesh for example, will subsidise environmental, social and governance (ESG) audits. This amounts to financial help to make your factory more sustainable. 

What importance do you and CLE  give to research and education in general, and to the work of India’s Central Leather Research Institute (CSIR-CLRI) in particular?

The institutions are doing a lot of research on sustainable production, for example on how to add value to waste material. The entire team at CLE is motivated to take all these messages about new processes, new chemicals, new leathers to our member companies. We feed information from the institutions to them and feed back to the institutes what our members are asking for and this is working. If we want to become global leaders we have to spend money on research. We have hope that CLRI will receive increased funding from the government of India. All of our state governments, as well as the central government, are looking at our sector because of the fact that we are people who can create a lot of employment. You can’t get that from, say, the IT industry. This is very significant for the government.

Are you satisfied with the role and status of India’s leather sector within the global leather industry? If not, what would need to change for India to offer a higher level of global leadership?

No, we are not satisfied. How could we be? We want to grow. We don’t mind being second, but we don’t want to be a distant second. If Bangladesh and Vietnam can grow, India can definitely grow and grow at a much faster pace. In India there are no kick-backs, but the kick-backs in other countries are reducing, with big impacts on industries such as clothing and footwear. Their governments have said their industries have to be compliant with World Trade Organization rules. Bangladesh, for example, has benefited from having ‘Least Developed Country’ status, giving it favourable access to key markets, but that will end in 2026. [Note: The United Nations Committee for Development Policy recommended Bangladesh’s ‘graduation’ from Least Developed Country status in 2021, but it has allowed a preparatory period of five years rather than the expected three, due to the covid-19 pandemic]. Bangladesh has maybe had an edge on us, but that edge is going to go away.

How would you describe the relationship between the government of India and the country’s leather industry at the moment?

It’s also true that we have had certain issues with the government in the past but now we want to move forward with the government, move forward to the next level of production while reducing production costs. I must thank former chairman Sanjay Leeka for working very hard to win government support for including leather among the industries that can take part in a programme it introduced in 2020, the Production Linked Incentive (PLI) Scheme. It means that whatever money you invest in domestic manufacturing you can get back within five years. Leather could win PLI approval any day now and if that happens it could help us to double the entire eco-system for our industry. That’s important because the biggest problem in this country is supply chain management. That’s why we are a little bit behind China. The whole perception of the government has changed. For example, we used to have to approach export promotion body Invest India for help. Now they are coming to us to talk about the possibilities. Three months ago, Mr Leeka hosted a visit from partners from Taiwan and a meeting with state government officials was part of the programme. They were delayed and it was eight o’clock in the evening before they reached the government building for the meeting. The Taiwanese visitors were surprised that the lights were on and that there were around 200 cars in the car-park. Seeing everyone still working hard so late in the evening surprised them. They said it reminded them of China in the 1990s.

Rajendra Kumar Jalan, re-elected as chairman of the Council for Leather Exports at the start of 2024.
All Credits: WTP

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