• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Our Bureau

KOLKATA, July 10

THE persistent declining trend in the exports of leather garments is worrying the Union Commerce Ministry, which has called upon exporters to take immediate corrective action.

The situation has been described as "alarming'', coming as it does at a time when almost all other leather export product sectors were doing well and clocking positive growth rates (however marginal).

Garment exports, being the single largest item, contribute 23 per cent of the country's total leather exports. The exports recorded negative growth rates for almost all the months in 2000-01, with the drop being as sharp as 51 per cent in some months, according to the Directorate General of Commercial Intelligence and Statistics.

For the financial year 2002, the drop has been put at 17.77 per cent touching $378 million. Between January and April 2002, there have been double digit negative rates till April (barring February when some ground was covered). However, in March only $17.34-million exports were made against $31.77 million during the same month last year. In April, exports stood at only $9.34 million ($17.7 million), registering a 47-per cent fall.

India, which had a 11.56 per cent share in the world market for garment exports in 1996, has been witnessing a steady erosion in its hold as it failed to keep pace with the growth in the global market.

Imports of garments increased from $3,669 million in 1996 to $4,412 million in 2000 according to statistics given by ITC Geneva and DGCIS here. However, Indian exports grew at a slower pace resulting in a rollback of shares in the world market.

The major importers of leather garments are the US, Germany, France, the UK, Japan, Hong Kong, Spain and Italy, Netherlands, Denmark, Austria and Switzerland.

There was a continuous downtrend in garment exports in the past 10 months and it was felt that steps had to be initiated to check the negative trend immediately.

The Council for Leather Exports had asked its product panel chairman and select exporters to convene meetings of small groups of exporters at different centres to discuss matters, sources said.

Feedback from exporters suggested that the negative growth was due to uncompetitive prices primarily on account of cheap Chinese exports. "China has started making sheep, goat skin and also pig skin leather garments, leather cloth and other accessories and its prices are very competitive in the global market'', exporters said.

An analysis of the share of exporting countries between 1995 and 1999 showed that China had increased its share in all the major markets barring Italy. It had a 70 per cent share of the US market in 1999. The US is one of the top importers of leather garments. In 1999, China was shown to be having nearly 50 per cent of the total leather garment market. China has been making its presence felt very strongly in the international leather market for some years now, steadily increasing its share from 13 per cent in 1996 to 18 per cent in 2000. During this period India's share increased from 2.11 per cent to 2.59 per cent, while Italy too witnessed an erosion of its market from 18.7 per cent to 15.9 per cent.

Sources said the decline in leather garment exports was evident in respect of major markets such as the US, Germany, Spain, the Netherlands, Denmark and the UK. Indications are that the higher-end and middle range exporters are not feeling the onslaught of the Chinese invasion, which is being felt mostly by the lower-end of the market.

Even as the industry tries to get its act together, it has been asked by CLE to start making adequate investments to enhance productivity and upgrade quality while making the right marketing strategies to recapture its lost markets.

Send this article to Friends by E-Mail

Stories in this Section
Safeguard duty mooted on epichlorohydrin imports

Copyright © 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line