The leather industry is seeking government assistance to help it tide over the European crisis fearing a downturn in growth in the second half of the financial year.
The European crisis will hit the leather industry as 65 percent export transactions are in euro and 10 per cent in pounds, according to Habib Hussain, chairman of Council for Leather Exports (CLE).
Although there has been a remarkable turnaround with a growth of 25 per cent in different segments in the first four months, the downside in the market is heavily dependent on euro (75 per cent of our trade is euro-centric), Hussain said.
"There has been a tremendous growth in the last four months. We expect a very good first half but the bottom-line is expected to be rough," he said.
"We urge the government to handhold us during this period", he added.
Highlighting the volatility in currencies that is affecting the business, he said, "You bid for a contract quoting the prices.
But the signing of contract only takes place after four to six weeks once you get the order and by then the currencies fluctuate."
"A month ago China allowed its currency to fluctuate but it was in decimals where as rupee fluctuates in digits, which is a cause of concern," he added.
"Now most of the industries have got order from abroad. With the crisis staring at us it looks like the more you produce the more you lose," he said.
"The irony is while the world leather industry is looking at India as an alternative to China, we are hit by the European financial crisis which is not a healthy sign for industry," Hussain added.
He said though India is the second largest producer of footwear and leather garments in the world, it accounts for a mere three per cent in the global leather import of $137 billion.
Hussain stressed on the need for infrastructure as well as skilled workforce to develop it.
However, the leather industry is still optimistic about the growth.
It has set up a target to increase the export from $3.59 billion during 2008-09 to $7.03 billion during 201314.
The domestic market for leather is also expected to grow significantly in the future.
