India, the tanning segment is collapsing, and the leather chain loses ground

Il governo Modi taglia i dazi sull'epoxrt di pelle

Export is decreasing, there are concerns over the future and health risks. India’s leather chain is undergoing a challenging period as it is impacted by two main factors: on one side is the commercial war between the United States and China, while on the other is the forced shut-down of Kanpur’s tanneries which has recently been renewed.

In addition, there is a practical problem that risks of having heavy repercussions on the health side. The market is stagnant, tanneries are closed, and the price of raw hides is decreasing. This situation brings no positive impact over companies that must collect the leftovers of animals inside barns or along the streets, where, in part, the carcasses are being abandoned as of now.

Exports in the red

According to what reported by timesofindia.com, exports of leather goods have decreased to 2.3 billion USD during the period going from April to August of 2019, signifying a decrease of 5.09% in comparison to the 2.4 billion USD accounted for during the previous year’s period. Specifically, foreign sales of leather for soles products decreased by 8%, while sales of finished leather decreased by 8.97%. Footwear lost 21.36%. “China is the main buyer of finished leather for us, and in terms transforms it into products sold in the United States – explains the president of Council for Leather Exports, Aqeel Ahmed, to the Indian newspaper -. The drop was very significant due to the trade war”.

Collateral damage

The new regulation banning Kanpur’s tanneries from operating are, beside from creating direct economic damage to the businesses, that aren’t willing to respect the simplest environmental laws, creating collateral damages. Among them is the impossibility by entrepreneurs to assure the deliveries’ timeline of goods going to their clients. “Kanpur’s tanneries were unable to get even a single order while at Lineapelle, as buyers preferred businesses operating in Vietnam or Bangladesh”, explains Taj Alam, president of UP Leather Association and ex-president of the Council for Leather Exports, via the web pages of hindustantimes.com. “The frequent shut-downs have forces owners to miss out on precious orders from foreign customers, as the majority of manufacturers didn’t participate to any fair in Hong Kong, Delhi and Italy – continues Mr. Alam -. And now they have no interest in participating to the fair in Chennai”.

Rotting carcasses

Another significant problem is the one created by the animal carcasses piling up inside barns and streets of New Delhi. As reported by the hindustantimes.com, the company in charge of recovering and disposing the carcasses of cows, donkeys, and horses dead due to natural causes or other incidents, is no longer performing the service due to the severe drop in the price of raw hides, which makes the business no longer advantageous, economically speaking. Not too long ago, in fact, animal carcasses were collected from the street via the use of contractors, as they would bring them to slaughterhouses of their property where they would recover the hide of the dead animal to sell to tanneries. But now that the market has become stagnant and most of Kanpur’s tanneries are closed, nobody buys the hides anymore. To fully comprehend the issue at hand it is important to know that, as reported by the mentioned news source, “between 150 and 200 animals die every day for the above-described reasons”. The renewed forced shut-down imposed on Kanpur’s tanneries is supposed to last until October 30th, but many entrepreneurs believe that the following day the government will impose another ban on any activity, in order to prepare the Ganges river for the Kumbh Mela event taking place in January.

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