India Leather exports hit by COVID-19 pandemic, suffers 10.89% decline
Exports of leather and its products have been severely affected so far this financial year due to the COVID-19 pandemic, Aqeel Ahmed Panaruna, chairman, Council for Leather Exports said.
As per provisional data from Directorate General of Commercial Intelligence and Statistics, the exports declined by 10.89% to about $5.07 billion in 2019-20 from $5.69 billion in 2018-19.
“Only about 10% of exports could be effected in March 2020 due to COVID-19. For combined April and May 2020 we achieved only 17% or $128.52 million in exports when compared to $757.11 million in April-May 2019,” Mr. Panaruna said.
“Our major markets of Europe and USA (to which 70% of our exports are directed) were very severely affected by COVID-19. Many buyers are filing bankruptcies which is a huge concern, leading to cancellation of export orders,” he added.
Mr. Panaruna said exporters were facing difficulties on account of such order cancellations because the insurance offered by Export Credit Guarantee Corporation (ECGC) was not extended for pre-shipments.
Hence a need to evolve an ECGC policy to extend coverage for pre-shipment losses also caused by pandemic and natural calamities, he added.
Mr. Panaruna said while the export of leather, leather products and footwear stood at $442 million in June 2019, only 35% or $155 million was expected in June due to the continuing lockdown.
“In July 2020, we will be able to achieve 50% of exports as compared to same period last year, provided there is exit from the lockdown. However, if lockdown continues, there will be further decline in exports,” he added.
Mr. Panaruna expects the exports to be back to normal from September 2020 onwards and said despite the current setback there was still huge opportunity for the sector, as India was now a preferred sourcing destination for major markets of USA and Europe.
The Council for Leather Exports (CLE) would be signing Memoranda of Understandings with Footwear Distributors and Retailers of America and U.S. Fashion Industry Association to further strengthen and enhance market presence in the U.S. market, he added.
CLE participated in the Virtual B 2 B meetings with Korean and Vietnam entrepreneurs and buyers recently, which were organized by the respective Indian Embassies. CLE is also in touch with EU, UK and Russian markets, Mr. Panaruna noted.
It is also holding virtual exhibitions with Russian buyers in July and with Peru in August respectively and many other potential markets.
“I am confident that we should still be able to reach $5 billion exports in the financial year 2020-21. Our industry is very keen to utilise the emerging opportunities and will undertake all possible efforts to revive our export growth,” Mr. Panaruna said