Indian and Bangladeshi tanning does not take off again due to provisions and cash

Indian and Bangladeshi tanning does not take off again due to provisions and cash

Indian and Bangladeshi tanning does not take off again as leather industry is still affected by CRV crisis. On the one hand, in New Delhi they are concerned, most of all, about the financial issues and economic repercussions caused by the pandemic: apparently, so far, measures implemented by Modi government look rather ineffective after all. In Dacca, instead, they wonder about the outcome (in tanning terms) of the forthcoming Eid-al-Adha. In fact, companies claim they are not ready to take large provisions of raw hides and skins, which will be available after sacrificial slaughtering.

Indian and Bangladeshi tanning

In June, almost all of Indian tanneries started working again. Most of them are small-sized companies. Yet the reopening, following lockdown alongside the cancellation of orders, turned out to be very difficult to many of them. That is why Prime Minister Narendra Modi has announced that banks are going to support the leather tanning industry. While dealing with banks, the Indian government will act as a guarantor for an overall 40-billion-dollar fund, which will be allocated as loans in favour of small-sized enterprises.

The problem is that several entrepreneurs, actively working in the trade industry, have already taken out a mortgage or asked banks for loans; hence, they think they will not be able to handle further debts. As reported by Reuters press agency, the Consortium of Indian Associations (CIA) wrote a letter to the government to inform them that 35% of India’s small enterprises, which amount to 650 million units in total, might close down shortly in the absence of public support. Furthermore, many banks, as reported by gulf-times.com, are allegedly calling for further guarantees: in fact, reportedly, since the government’s pledge is not enough for them, they are urging entrepreneurs to provide further reassurances. That is why tanners asked India’s government for a non-repayable financial support.

A useless sacrifice

In the meantime, in Bangladesh they wonder about the possible use of raw hides and skins that will turn available during the forthcoming Feast of the Sacrifice (30 July – 3 August). During the annual religious ceremony, believers usually slaughter cows and sheep. After slaughtering, tanners generally purchase the remaining raw hides. For the records, such material accounts for around 50% of leather that undergoes tanning throughout the year. In 2020/2021, things might not be like that though. In fact, after lockdown, tanneries had to deal with a remarkable downturn in orders. Consequently, they had to discard a large amount of raw hides and skins formerly stocked in their warehouses: without proper treatment, raw hides turned therefore to waste.

Aiming to tackle such risky situation, as reported by thedailynewnation.com, the Minister of Trade is supposedly planning to fix the prices of raw hides and skins they will collect during the Eid-al-Adha. In so doing, he would meet tanners’ needs. According to the Bangladesh Tanners Association (BTA), outstanding stocks amount to about 35% of hides. The government, then, aims at resolving the issue by finding a general solution: it might not be enough though. Reportedly, several businesses could not get any loans for their new purchases: therefore, they will not be able to carry out new investments.

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