Poor outlook for India's leather industry in FY08

by:JIYALI     2021-08-04
As operating overhead costs (mainly labor) continue to rise, the affordability of the Indian leather sector is close to the bottom line. Leather experts worry that the leather industry will become increasingly difficult in the future. The leather industry is a labor-intensive industry, but in the past six months, about 8,000 workers were unemployed, of which 4,000 were unemployed in leather companies located in Tamil Nadu, Agra and Kanpur. Another 10,000 employees may be unemployed before the end of March 2008. For the leather department, 2007 was mixed. Leather exports rose by 15% between April and September, with exports reaching 3.1 billion. From September to November, exports declined and only increased by 8%. This is because the rupee continued to appreciate against the U.S. dollar last year. Between September and November, the rupee appreciated by 8% against the U.S. dollar. Therefore, the leather department also suffered the most serious losses in this quarter. A 9% reduction in leather production has led to a large number of layoffs in companies to reduce operating costs. It is very slim to reach the goal of 15% growth in the leather sector's exports in fiscal 2008. Compared with the 11% growth in fiscal 2007, it is likely to hover around 7% in 2008. In order to overcome the financial crisis, the Indian leather industry intends to apply to the central government to extend the preferential bank loan interest rate policy for another year. About 4 months ago, the loan interest rate for the leather sector was 9%, and the government reduced it to 7%, and it is valid until March this year.
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