Leather Exports Presentation Document

1. Presentation on exporting
leather (exports & imports)
 Presented to :- Prof.Dharmendra Khairajani
 Presented by :- Mr. Brijesh Patel
Roll No :- 23

2. Flow Of Presentation
 Introduction
 History of leather
 Exports Highlights
 Introduction about council of leather exports
 Analysis of 2017-18
 Imports place and exports country information
 Strength and weakness
 Types of leather
 Custom formalities
 Document for exports
 Exports duty
 Transportation roots and ports
 costing

3. Introduction
 Leather is one of the most widely traded commodities globally. The growth in demand
for leather is driven by the fashion industry, especially footwear.
 Apart from this, furniture and interior design industries, as well as the automotive
industry also demand leather.
 The leather industry has a place of prominence in the Indian economy due to
substantial export earnings and growth.
 The Indian leather industry accounts for around 12.93 per cent of the world’s leather
production of hides/skins.
 The country ranks second in terms of footwear and leather garments production in the
world and accounts for 9.57 per cent of the world’s footwear production.

4. History of Leather
 The primitive man, even more than 7000 years ago, made and used leather goods.
 He dried fresh skins in the sun, softened them by pounding in animal fats and brains,
and preserved them by salting and smoking. Of course, the products were crude,
made for protection than as fashion.
 The Egyptians and Hebrews developed around 400 BC, the process of vegetable
tanning that involved simple drying and curing techniques Under the Arabs during the
middle Ages, the art of leather making became quite sophisticated.
 Morocco and cordovan leathers were in great demand. The ancient puppet theatre in
the southern India used primarily leather dolls. The tradition continues even today.

5. Exports Highlights

6.  Total leather and leather good exports from India stood at US$ 4.72 billion during April
2016-January 2017.
 During April 2016-January 2017, the major markets for Indian leather products were
US (15.69 per cent), Germany (11.82 per cent), UK (10.85 per cent), Italy (6.61 per
cent), Spain (5.27 per cent), France (5.02 per cent), Hong Kong (4.71 per cent), UAE
(3.69 per cent), China (3.16 per cent), Netherlands (3.01 per cent), Belgium (1.78 per
cent) and Australia (1.44 per cent).
 At 48.82 per cent, footwear (leather and non-leather) and footwear components
accounted for the lion’s share of leather exports in April 2016-January 2017, followed
by leather goods and accessories with 23.37 per cent share, finished leather with 15.60
per cent share, leather garments with 9.71 per cent share and saddlery & harness with
2.50 per cent share.
 Per capita footwear consumption in India is expected to increase up to four pairs, while
domestic footwear consumption is expected to reach up to five billion pairs by 2020.

7. Introduction about council of leather exports
 The Council for Leather Exports (CLE) is an autonomous non-profit organization, which is
entrusted with export promotion activities and the development of the Indian leather
industry.
 About 3,172 companies manufacturing/exporting leather and leather products are members
of the Council.
 CLE is committed towards the overall development of Indian leather sector and achieve
higher export growth to enhance India’s share in global leather trade.
 CLE is functioning under the aegis of Ministry of Commerce & Industry, Govt. of India. It
is the notified Export Promotion organization for entire leather & leather products industry

8. Analysis of 2017-18
product wise analysis (Source: DGCI &S)
(Value in Million RS)
CATEGORY
APR-JUN 2016-17 APR-JUN 2017-18
% VARIATION
FINISHED LEATHER 16778.72 15348.64 -8.52%
LEATHER FOOTWEAR 36325.13 31954.44 -12.03%
FOOTWEAR COMPONENTS 5040.86 5336.10 5.86%
LEATHER GARMENTS 8941.29 8962.13 0.23%
LEATHER GOODS 21104.15 21364.66 1.23%
SADDLERY AND HARNESS 2235.87 2343.60 4.82%
NON-LEATHER FOOTWEAR 5815.91 6223.64 7.01%
TOTAL 96241.93 91533.21 -4.89%

9. Country wise analysis
(Value in Million US$)
TOTAL Share in
COUNTRY APR-JUN APR-JUN % change Total Export
2016-17 2017-18 2017-18 2017-18
GERMANY 161.69 159.39 -1.42% 11.22%
U.S.A. 219.32 208.20 -5.07% 14.66%
U.K. 154.93 142.78 -7.84% 10.05%
ITALY 108.62 99.78 -8.14% 7.03%
FRANCE 69.96 73.14 4.55% 5.15%
HONG KONG 76.03 64.24 -15.50% 4.52%
SPAIN 79.03 65.70 -16.86% 4.63%
RUSSIA 11.29 12.04 6.65% 0.85%
NETHERLANDS 40.45 43.38 7.25% 3.05%
AUSTRALIA 17.38 19.27 10.86% 1.36%

10. Imports place and exports country
information
Because Kanpur is a hub of leather. In India’s mostly leather are produce in Kanpur. 40%
India's leather are produce in Kanpur.
Supplier =
A.M International (indiamart)
Jajmav, Kanpur
Co.no = 08448411268

11. Exports country
 Germany is a second largest country when India exports the leather of 153.39 million
us$ in 2017-18 April to June. India’s 11.22% exports are in Germany only. So the
Germany are mostly import the lather products.
 India supply the 10.1 percent to EUR 245 million leather in total imports of Germany.

12. Strength and weakness
Strength
 India has 10% of world’s total animal population so strong raw material base.
 For better technology, Central Leather Institutes produces qualified leather technocrat.
 Growing market.
 Purchasing power increases worldwide.
 Indian leather industry has provided employment to 2.5 million people.
Weakness
 No quality specifications, poor quality accessories
 Competition from low price markets like Pakistan, Ethiopia, Indonesia and Kenya.
 Did not project position of products, positioning is wrong not match to Italian target is just
to match Pakistan.
 No brand name.
 Unorganized sectors

13. Types of leather
 Aniline leather is the most natural looking leather with the unique surface
characteristics of the hide remaining visible. Aniline leather is colored only with dye
and not with a surface coating of polymer and pigment. A light surface coating may be
applied to enhance its appearance and offer slight protection against spillages and
soiling. Aniline leather
 Semi-aniline leather is more durable than aniline whilst still retaining a natural
appearance. The increased durability is provided by the application of a light surface
coating which contains a small amount of pigment. This ensures consistent color and
imparts some stain resistance.
 Pigmented Leather is the most durable and is used in the majority of furniture
upholstery and almost all car upholstery. The durability is provided by a polymer
surface coating which contains pigments. The surface coating allows the manufacturer
more control over the properties of the leather, e.g. resistance to scuffing or fading.
 The thickness of the surface coating can vary but if the mean thickness is more than
0.15mm then the product can't be sold as leather in the United Kingdom due to
consumer protection legislation.

14.  Full grain pigmented leather
 Corrected grain pigmented leather
 Finished split leather
 Antique grain
 Pull-up leather
 Nubuck
 Suede

15. Custom formalities
 Goods may be shipped out of India only after Customs clearance has been obtained.
 „ Following documents to the customs authorities,
 1. Shipping bill
 2. Declaration regarding truth or statement made in the shipping bill
 3. Invoice
 4. GR form
 5. Export license
 6. Quality control inspection certificate
 7. Original contract, wherever available or correspondence leading to contract
 8. Contract registration certificate
 9. Letter of credit
 10. Packing list
 11. AR-4 form
 12. AR-1 form

16. Document for exports
Principal Export Documents
1. Commercial invoice
2. Packing list
3. Bill of lading
4. Combined transport document
5. Certificate of inspection/quality control
6. Insurance certificate/policy
7. Certificate of origin
8. Bills of exchange and shipment advice

17. Auxiliary Documents
1. Performa invoice
2. Intimation for inspection
3. Shipping instructions
4. Insurance declaration
5. Shipping order
6. Mate receipt
7. Application for certificate of origin
8. Letter to the bank for collection/negotiation of documents.

18. Regulatory Documents
1. Gate pass-1/gate pass-2 – Prescribed by Central Excise Authorities
2. AR4/AR4A form - prescribed by Central Excise Authorities
3. Shipping Bill/Bill of Export - prescribed by Central Excise Authorities
4. Export Application/Dock Chillan – Prescribed by Port Trust. International Marketing
Chapter 22 Export Procedures and Documents
5. Receipt for payment of Port Charges
6. Vehicle Ticket
7. Exchange Control Declaration – Prescribed by RBI GR/PP Forms
8. Freight Payment Certificate
9. Insurance Premium Payment Certificate

19. Exports duty
 Some items like tanned leather, snake, skin, fur lamb skins, luggage leather ,
industrial leather carry lower rate hovering around 15-25%.
 Last year, the government in its budget announcement, brought down the import duty
on imported machinery for manufacturing leather goods from 7.5% to 5%.
 Semi finish leather 25% exports duty.

20. Transportation roots and ports
 MUNDRA PORT TO HAMBURG PORT
 Distance=7431 nm,
 Total transportation day =31 days
 Container = dry container

21. costing
Supplier supply me leather at price of 90 per ft2
Supplier at Kanpur.
1 ft2 = 0.92903 m2
I bought 1, 00,000 ft2 leather = 9290.304 m2 leather
Total price of leather bought is 90, 00,000 rupees
Transportation cost is = 15,000 rupees (Kanpur to mundra)
Registration price = 60,000 rupees (including all document)
Export duty = 2250000 (25% of price)
Packing cost = 30,000
Loading and unloading = 5, 00,000 (with shipping charge)
TOTAL COST = 11855000 = 157042 EURO (per product my cost is 1.57 euro)
PRODUCT PRICE =2.57 EURO (PER FT2 (I CHARGE)) (193.97 rupee)
PROFIT = PER PRODUCT 1 EURO
TOTAL PROFIT IN RUPEE = 7547900.00

22. Thank you