Pranav Varshney Chennai

 23 August

Ranipet, a leather export hub in Tamil Nadu, has shifted its focus from exports to domestic market due to a decline in leather exports caused by the European Union’s new deforestation regulations.

Drop in Leather exports

The Council of Leather Exports reported a 9.6% drop in Indian leather exports to the EU, from $431.21 mn in April-June 2023 to $389.88 mn in April-June 2024

People who suffer from this ordeal

Imran Ahmed, owner of KAS Bashu and Company, said that 70% of Ranipet exporters are focusing on domestic market and 30% on synthetic market. His German client Deichmann SE has reduced its buying price per shoe from €14 to €11, making it difficult for leather shoe exporters like Imran Ahmed to yield more profits. The new European Union deforestation law has led to a 15% increase in operation costs, reducing profits by 5%, he said

The new European Union Deforestation Regulation (EUDR), effective from January 2024, mandates ex porters to prove their products do not contribute to deforestation

Implications of this

This regulation has led to increasing operational costs and complicating market access for Indian exporters.

Major markets, including Germany, Italy, France, and Spain, have seen significant reductions in imports from India, with Spain experiencing the steepest decline at 18.39%

companies which suffered

Due to the growing popularity of sports shoes, companies like K.H. Group and Farida shoes have entered the synthetic market. Local businesses like Forward Group have partnered with Italy’s Conceria Virginia to focus on local footwear manufacturing. Language Shoes, under Chief Executive Officer Akther Hussain, has transitioned from leather exports to retailing handcrafted shoes.Bachi Shoes has shifted from exporting children’s footwear to the European and US markets to domestic retail.

QUOTE FROM THE GOVERNMENT

“We are facilitating training programs, investing in technology solutions like geo-tagging systems, and providing financial aid to help domestic businesses to adapt to the competitive global market,” said Unnikrishnan , Joint Director of the Federation of Indian Export Organizations (Federation of Indian Export Organizations ).