An earthquake is shifting things in Asia’s manufacturing industry. The same is happening in the leather segment, because while China is forced to shut down production due to new Covid waves, its neighbors (India first, then Bangladesh and Pakistan), are trying to take market shares away from the former. Even with some structural limitations, India has presented surprisingly positive results within the leather chain. The country has also just signed a trade agreement with Australia. Bangladesh is taking huge steps forward. Will this change become structural, or will it fade?
India throws the glove on leather
Europe and America make the most leather and leather products used by India. Sanjay Leekha, president of Indian agency CLE (Council for Leather Exports), presented the market trends during APLF. The EU is still worth 55% of Indian exports, but the US, currently worth 17%, is growing. “Our exports to the USA – writes internationalleathermaker.com – surpassed 1 billion USD in value during the last financial year”. The goal is to bring foreign revenue to 30 billion USD per year within the next 10 years. Things are already going well, as said by prime minister Modi a few days ago. Yet, the exchange with the USA rings an alarm bell for the consolidated Chinese interest.
Trade agreement with Australia
To reach its goal, India has also signed a trade agreement with Australia. In doing so, the country should nearly double its trade from 27.5 billion USD (data from 2021) to over 45 billion by 2026. The deal, as reported by asia.nikkei.com, eliminates duties on over 85% of all Australian exports to India, up to 91% in 10 years, and on 96% of Indian goods going into Australia.
Signs of the challenges were visible at APLF’s stands. The fair, this year, took place at the Dubai World Trade Center and was the first one without Chinese operators. The new Covid waves and the strict approach to containing the virus are weighing on movements and production of the People’s Republic. This represents an opportunity for India, as well as Pakistan and Bangladesh. These countries, in fact, according to the Export Promotion Bureau, are on the right track. In the first 9 months of the fiscal year, Bangladesh’s leather industry exported goods for 896.8 million USD, or 30% more than the same period of the previous year. Raw material exports grew 28% to 540 million USD, while finished leather was up 40% to 115 million. Leather goods’ exports were also up 34% to 242 million USD in value.