Patentmatics Monthly Bulletin October 2014.
(a)Foreword.
DuPont upbeat about crop protection biz in
India
Harish Damodaran, Business Line, August 28, 2014.
Rik L Miller, Global President, DuPont Corp. Protection Pvt. Ltd – “Company sees no issues with
country’s IPR regime”
New Delhi, August 28:
DuPont says that it will introduce in India one new pesticide product every year over the next
decade.
These would cover a range of insecticides, fungicides, herbicides and nematicides, based on
the $36-billion US major’s proprietary chemistry.
“We may be only the sixth largest global agrochemical company behind Syngenta, Bayer,
BASF, Monsanto and Dow AgroSciences. But we have the most robust product pipeline that
we also want to bring to India,” Rik L Miller, President, DuPont Crop Protection, told
Business Line.
India’s intellectual property rights regime has registered “marked improvement” in recent
times.
“Although the prosecution and enforcement mechanism here may not be as strong as in the
US and Western Europe, it is encouraging enough for an MNC such as DuPont to operate and
introduce new products based on our proprietary chemistry,” he said.
Blockbuster product
He cited the example of Rynaxypyr, a patented insecticide molecule marketed as ‘Coragen’
suspension concentrate solution and ‘Ferterra’ granular formulation.
Rynaxypyr – used against a broad spectrum of lepidopteran insect pests whose larvae bore
into and feed on the tender shoots, stems, flower buds and fruits of crops from paddy,
sugarcane and soyabean to pulses and vegetables – was launched globally as well as in India
in 2008.
In 2013, sales of Rynaxypyr crossed $1 billion globally, of which more than a tenth came
from India. “No crop protection molecule in history has achieved annual sales of over $1
billion in such a short period of time. We are happy that India, too, has contributed to this,
with about 6.5 million acres of crop area treated with Rynaxypyr in the country last year,”
noted Miller.
Rynaxypyr – the actual molecule is called chlorantraniliprole – is based on a new class of
insecticides known as anthranilic diamides.
These basically work on the ‘ryanodine receptors’ in insect pests regulating the release of
stored calcium critical for their muscle function. By binding to these receptors, the diamide
compounds cause uncontrolled release and depletion of calcium, leading to muscle paralysis
and ultimately death of the insects.
New launch
In the current kharif season, DuPont has launched yet another insecticide Cyazypyr (or
cyantraniliprole, as the active ingredient molecule is called), that is being sold as ‘Benevia’
oil dispersible solution.
Cyazypyr is again based on the same anthranilic diamide chemistry, though this product can
control both lepidopteran (borers) and sucking pests (white fly, thrips, aphids, etc).
“Benevia is effective when applied at an early crop stage (within the first 25-30 days
window), whereas Rynaxypyr is for later stage (after 60-70 days). We also recommend
farmers to use some other insecticide, say Indoxacarb, in between so as to avoid back-to-back
application of the same chemistry. This reduces the chances of build-up of resistance by the
pests”, Miller explained.
The patents of both Rynaxypyr and Cyazypyr are valid up to the early 2020s, which
guarantees protection and extra pricing power for the next 8-9 years or so.
“The Indian farmer is willing to pay a premium if he sees the product vastly reducing crop
yield losses. There is no better proof of this than the adoption rates we have seen for
Rynaxypyr,” Miller claimed.
DuPont is also introducing this year in India a fungicide ‘Galileo’, mainly for control of rice
blast. The active ingredient in this, picoxystrobin, was an original invention of Sygenta.
“We subsequently acquired this and developed it further for use against soyabean rust,”
Miller added.
(b) Self Reliance in Rural Development through Modern S&T
- Leather Processing, Modernization of Tanneries, Part 1.
1. In the Foreword of October 2013, we wrote the following:
“October 2 is being celebrated every year by all of us with very many remembrances as the
birth day of Mahatma Gandhi, the Father of the Nation. One of his greatest teachings, and
which is also of greatest contemporary relevance, is as summarized below:
When you are in doubt, or when the self becomes too much with you,
apply
the
following
Recall
whom
the
face
of
you
may
If
step
the
Will
you
contemplate
he
Will
it
restore
In
and
other
the
have
poorest
seen,
is
going
gain
him
words,
to
a
will
it
spiritually
and
the
and
to
be
of
weakest
man
ask
yourself,
any
anything
control
lead
over
to
his
test:--
use
by
own
‘Swaraj’
starving
to
him?
it?
life
and
destiny?
for
the
hungry
millions?
Then you will find your doubt and your ‘self’ melting away”.
The September 2014 issue had ended as follows: “Finally as has been our
previous practice too, after reviewing the Self Reliance related
contributions of DRDO in the highly critical defence sector, we start from
October (the birth month of Mahatmaji) onwards another sector which is
also a very ‘critical’ sector from the point of view of societal uplift and rural
development, namely, the predominantly export-oriented leather sector in
which modernization of the centuries old tanneries has been acknowledged as
a very significant contribution by the nation’s premier Central Leather
Research Laboratory (CLRI) of CSIR under the Union Ministry of Science
& Technology”. In essence if our rural side has to be modernized, all the
components of production and services constituting the rural economy must
also be modernized by utilizing appropriate ‘technology ladders’ through
modern S&T. Undoubtedly the Leather Processing Sector is one of the major
elements of this process of rural development. In other words, modernizing
this sector would undoubtedly make the life and livelihoods of the thousands
of men and women employed by this sector far more liveable, even if it is
also uniquely linked with the global market!
2. When we think of modernization of the Indian leather sector, we
obviously think of its largest dedicated public-funded R&D centre even by
world standards, Central Leather Research Institute working under the
umbrella of Council of Industrial & Scientific Research of Ministry of
Science & Technology of the Union Government. And when we think of
CLRI, we immediately in turn remember its doyen leader Y. Nayudamma.
His life-long mission was to connect the research laboratory with the
industry to benefit the poorest of the poor. As the youngest director of
Central Leather Research Institute in Madras, he left no stone unturned to
make tanning a dignified industry and tanners a respected lot; and
fortunately for us his life and achievements have recently been published as
a monograph “The Peoples’ Scientist, Dr Y.Nayudamma, A Biography” by
K Chandrahas, a close associate of YN and a retired Income Tax
Commissioner. As someone aptly had said elsewhere, “The title of the book
‘The People’s Scientist Dr Y Nayudamma is indeed apt for someone who
always strove for employing technology in the service of the common man.
His life-long mission was to connect the research laboratory with the
industry to benefit the poorest of the poor. As the youngest director of
Central Leather Research Institute in Madras, he left no stone unturned to
make tanning a dignified industry and tanners a respected lot”. We
dedicate this Series starting in the birthday month of Mahatmaji most aptly
to the memory and contributions of late Y. Nayudamma and his band of
successors in the field.
3. A brief review of this pioneering book is given below from The
Hindu dated July 1, 2013 by D Devarajan and this is given below:
“A biography may be defined as the written history of a person, with
attention not only to the events in his life, but also to the character and
disposition of the person. A good biography holds a mirror against the
person — neither hyperbole, nor understatement. This biography of Dr. Y.
Nayudamma comes close to the model created by James Boswell in Life of
Johnson. The reader receives the impression of walking with the man in
flesh and blood. Born as the eldest child of simple and illiterate parents in a
remote village in Andhra Pradesh, Nayudamma grew up in a rural
environment until he went to Benares Hindu University for his graduation
in Industrial Chemistry. Nayudamma was a scientist of the people and for
the people. A deep concern for the poor in rural India was always an
obsession for him. He firmly believed that technology was the engine of
growth. His credo was to bring some sunshine into the lives of the rural
poor. He joined the Central Leather Research Institute at Chennai in 1943
as a Demonstrator, on a salary of Rs.17 a month. Sheer merit and hard
work won for him an opportunity for training in England in 1946. From
the U.K., Nayudamma went to the U.S. to pursue MS, and PhD in Leather
Technology — the first to get a doctorate in the country in this academic
field. In 1951, he returned to CLRI as Assistant Director. However, within
a fortnight, he was promoted as Deputy Director, as the powers that be
sought to set right an anomaly that “Assistant Directorship was too low a
position” for him. Six years later, when the incumbent Director passed
away, Nayudamma was the obvious choice for the vacancy. But as he was
quite young — only 34 years old — he was given the job only on a
temporary basis. He was equally at home with the peasant and the prime
minister. In his illustrious career, he collaborated with three different
Prime Ministers. Nayudamma always did what seemed to him as right and
he could not be bullied or bamboozled by unrighteous might.
“Two years later, when the issue of permanency surfaced, the Prime
Minister, “Jawaharlal Nehru (himself) wished to interview Nayudamma
personally. The appointment with Nehru was around midnight … He
(Nehru) told Nayudamma that he would be the youngest person to head a
national institute and asked him point blank what he (Nayudamma)
proposed to do to develop the age old leather industry.” Nayudamma
replied: “I’ll endeavour to infuse scientific temper to the tradition-bound
leather industry, being pursued by the socially and economically
downtrodden leather artisans and help in their socio-economic uplift.”
Nehru was impressed with that reply and Nayudamma was confirmed as
the Director.
“Thirteen years later, in 1971, Nayudamma was selected by another
Prime Minister — Indira Gandhi — to head the Council of Scientific and
Industrial Research (CSIR) at Delhi. Nayudamma accomplished a
complete overhaul and rejuvenation of CSIR, during the six years that he
served as the Director-General. When there was a change in the political
leadership, despite the new Prime Minister Morarji Desai asking him to
continue as the DG, Nayudamma chose to resign. He returned to CLRI
intending to devote the rest of his life working for the welfare of the leather
artisans. But destiny had different plans for him. Indira Gandhi, Prime
Minister for the fourth time, invited him to become the Vice-Chancellor of
Jawaharlal Nehru University (JNU) at Delhi, which had a bag of
woes…..Nayudamma, tried his best to set things right, but in vain. After 16
months, he quit his job at JNU. He realised that his “diagnosis and
prognosis” were not acceptable to the hard core bureaucracy. His end was
tragic and traumatic. He was a passenger in the ill-fated Air India flight
from Canada – “Emperor Kanishka” – that crashed off the Irish coast on
June 23, 1985. He had changed from Swiss Air to Air India in the last
minute, so that he might arrive in India a few hours earlier”. We will come
back to this great story later.
(Incidentally
CLRI is also connected with a great scientific event in
molecular biology. The celebrated Triple Helical Structure of Collagen was
discovered by Prof.G.N. Ramachandran of Madras University in association
with CLRI in 1985. Most aptly enough, its new Auditorium has been named
Triple Helix and I too had the privilege of attending a distinguished seminar
in that very hall soon after its inauguration).
4. A brief history of Indian leather industry has been given by Joseph
Vakayi in Leather News. To quote him,
“Leather, the oldest manufacturing industry in India, catered to the
international market from the 19th century. Leather is a traditional Indian craft and the
primitive methods of leather-making are still alive in many villages in Uttar Pradesh,
Rajasthan, Madhya Pradesh, Punjab, Gujarat, West Bengal and Orissa. Modern
methods of leather tanning were introduced by the British in 1857. The first leather
factory in India was set up in Kanpur to make saddlery and harness. The following are
some of the notable years in the development of Indian leather industry.
1880: A boot factory was established by the British India Corporation in Kanpur
1890: More tanneries were set up in UP, Bengal, Bombay, Orissa and Central India
1895: Chrome tanning was introduced at Pallavaram, Chennai. It was also introduced
in Bangalore, Cuttack, and Kolkatta.
1903: Commercial chrome tanning started at Pallavaram, in Chennai.
1913: By 1913, 22 chrome tanneries were established in several parts of India.
Seventeen of them were at Pallavaram
The two world Wars had led to the establishment of more tanneries and product
manufacturing factories in Kanpur, Agra, Chennai and other places.
I948: The establishment of Central Leather Research Institute CLRI in Chennai
(Madras) as a constituent laboratory under the Council of Scientific and
Industrial Research (CSIR)
1951: Independent India banned the export of raw hides and skins and reserved the
production of leather and leather goods to the small sector.
1972: Dr A Seetharamiah Committee Report suggested export of finished leather and
value-added products only
1991: Economic liberalization and globalization helped leather industry also to flourish
2005: Cabinet Committee on Economic Affairs announced a Rs 2.9 billion- scheme for
the integrated development of Indian leather industry – modernization of tanneries and
setting up of modern footwear units were the focus areas.
12th Five Year Plan: The Plan aims at “enabling tanneries, footwear, footwear components, leather
goods and accessories, leather garments, harness & saddlery manufacturing units to upgrade
themselves leading to productive gains, right-sizing of capacity, cost cutting, design and
development including simultaneously encouraging entrepreneurs to diversify and set up new
units in the areas as specified. All existing units in the Leather and Leather Products industry
including tanneries, leather goods, saddlery, leather footwear and footwear component sector
having cash profits for 2 years, undertaking viable and bankable programmes on technology
up-gradation on or after 1 st January, 2011 are eligible for assistance. With a view to attract
investment into the sector, the assistance for establishment of new units would also be
provided. Assistance to units would be considered only if the project is appraised to be
bankable and viable by bank providing loan in case of loan cases and by bank in which the
unit has a working capital loan account in case of self- finance case. The project should lead
to: [i] Demonstrable increase in unit value realization and / or [ii] Production capacities and / or
[iii] Better compliance of pollution control norms. The financial assistance under the Scheme
will be investment grant to the extent of 30% of cost of plant and machinery for micro and
small enterprises and 20% of cost of plant and machinery for other units for technology upgradation /modernization and/ or expansion and setting up a new unit subject to a ceiling of
Rs.2 crore for each product line. Investment grant would also be available to units investing
th
their own resources….” In essence the 12 FVP also will strive within its ways and means to
consolidate and expand the sector to great levels.

According to Council of Leather Exports, “The Leather Industry holds a prominent place in

the Indian economy. This sector is known for its consistency in high export earnings
and it is among the top ten foreign exchange earners for the country.
With an annual turnover of over US$ 7.5 billion, the export of leather and leather
products increased manifold over the past decades and touched US$ 4.86 billion in
2011-12, recording a cumulative annual growth rate of about 8.22% (5 years).


The Leather industry is bestowed with an affluence of raw materials as India is
endowed with 21% of world cattle & buffalo and 11% of world goat & sheep
population. Added to this are the strengths of skilled manpower, innovative
technology, increasing industry compliance to international environmental standards,
and the dedicated support of the allied industries.
The leather industry is an employment intensive sector, providing job to about 2.5
million people, mostly from the weaker sections of the society. Women employment
is predominant in leather products sector with about 30% share.
Though India is the second largest producer of footwear and leather garments in the world,
India accounts for a share of close to 3% in the global leather import trade of US$ 137.96
billion (2010)

The major production centers for leather and leather products in India are located in
Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Vellore, Pernambut, Trichy,
Dindigul and Erode ; West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra,
Noida, Saharanpur; Maharashtra – Mumbai ; Punjab – Jallandhar ; Karnataka –
Bangalore ; Andhra Pradesh - Hyderabad ; Haryana - Ambala, Gurgaon,
Panchkula, Karnal and Faridabad; Delhi; Madhya Pradesh – Dewas ; Kerala –
Calicut and Ernakulam / Cochin
Strengths of Indian leather sector









Own raw material source – 2 billion sq ft of leather produced annually
Some varieties of goat / calf / sheep skins command premium position
Strong and eco-sustainable tanning base
Modernized manufacturing units
Trained / skilled manpower at competitive wage levels
World-class institutional support for Design & Product Development, HRD and R &
D.
Presence of support industries like leather chemicals and finishing auxiliaries
Presence in major markets – Long Europe experience
Strategic location in the Asian landmass
Emerging strengths








Design development initiatives by institutions and individuals
Continuous modernization and technology up-gradation
Economic size of manufacturing units
Constant human resource development programme to enhance productivity
Increasing use of quality components
Shorter prototype development time
Delivery compliance
Growing domestic market for footwear and leather articles
Highlights of Leather Product Segments:




Tanning Sector – Annual production of 2 billion Sq.ft accounts for 10% of world
leather requirement. Indian colours continuously being selected at the MODEUROPE
Congress
Footwear Sector - Second largest footwear producer after China. Annual Production
2065 million pairs. Huge domestic retail market 1950 million pairs (95%) are sold in
domestic market. Footwear export accounts for 45.05% share in India’s total leather
& leather products export. The Footwear product mix Gents 52%, Ladies 39% and
Children 9%
Leather Garments Sector – Second largest producer with annual production
capacity of 16 million pieces. Third largest global exporter. Accounts for 10.43%
share of India’s total leather export
Leather Goods & Accessories Sector including Saddlery & Harness - Fifth largest
global exporter. Annual production capacity - 63 million pieces of leather articles, 52
million pairs of Industrial gloves & 12.50 million pieces of Harness & Saddlery items.
Accounts for 23.44% share of India’s total export
Indian Leather Industry
July 31, 2013
by Joydeep
It is now a proven fact that the Indian leather industry forms a strong pillar of the Indian
economy. The phenomenal rise of the leather industry from a mere small time exporter of raw
materials in the 1960s to holding a major and prominent position in the Indian economy,
today the industry generates intensive employment, currently employing 2.5 million people
and that too mostly from the weaker sections, 70% of which are women.
As per a written statement by the Minister of State in the Ministry of Commerce and
Industry, Dr. D Purandeswari, “For the skill development of the leather work force, training
is provided under the sub scheme of Human Resource Development. During the Eleventh
plan 50,250 persons were provided training out of which 41,486 were placed in the industry.
Rs 44.88 crores was released for the same”. Further, the Indian leather industry’s immense
capability to earn foreign exchange has earned it the position of one of the ten top ranking
foreign exchange earners of India as evident from the fact that the export graph of the
industry soared in the past two decades and touched US$ 4.86 billion in 2011-2012, the
‘cumulative annual growth rate’ being an impressive 8.22% (5 years).
Indian leather industry has a huge export market consisting of mainly eleven countries of
which Germany accounts for a share of 14.34%, followed by UK (12.80%), Italy (11.52%),
USA (8.72%), Hong Kong (8.11%), France (7.07%), Spain (6.31%), Netherlands (3.98%),
Belgium (2.02%), U.A.E. (1.92%) and Australia (1.30%), accounting for 78.9% of the total
exports of the Indian leather industry and 3% of the global leather import trade (US$137.96
billion in 2010). Abundance of raw materials, high foreign currency earning capacity, a huge
export market, an employment intensive sector and advanced technical support has earned
India a well deserved position in the global leather scenario with an annual turnover of over
US$ 7.5 billion making the industry an indispensable part of the Indian economy.
India has an abundance of raw materials for the leather industry. India accounts for 21% of
the cattle and buffalo and 11% of the global goat and sheep population. The industry is
supported by new and innovative design development infrastructure. The Government
initiative of setting up seven Campuses of Footwear Design & Development Institute (FDDI)
in Noida, UP and Chennai, to name a few, ensures to provide skilled manpower for the
industry, is a major boost for the industry’s designing realm. A continuous human resource
development program is in place to increase the productivity of the industry. The Industry is
backed by intensive R&D involving technological upgradation which reduces the prototype
designing time span. Manufacturing units are economically sized which solves the space
problem. Other factors like use of high quality materials (because the industry is mainly
export oriented) and long time experience in the global market have proven to be some of the
major strong points of the industry.
The Indian leather industry can be subdivided into four sectors:
TANNING SECTOR: The tanning sector accounts for the production of a total of 2 billion
square feet of leather which caters to 10% of the global requirement. The unique colors of the
Indian leather make the industry a steady choice of the MODEUROPE Congress.
FOOTWEAR SECTOR: A diverse sector manufacturing gents, ladies and children’s
footwear has a stake of 45.05% in the total leather export of India. India is the second largest
producer of footwear after China with a whopping annual production figure of 2,065 million
pairs of which the expanding domestic market accounts for 1,950 million pairs (95%) of the
net production. Some of the famous international brands sourced from India include Hush
Puppies, Florsheim, Reebok, Salamander, Stacy Adams, Lama and Bally. Lakahani, Red
Tape, Bata, Liberty and Khadim’s are some of the well known brands sold in the domestic
market.
LEATHER GARMENTS SECTOR: Though a late entrant in this particular leather sector,
India has taken little time to be the second largest producer of leather garments with an
astounding annual production figure of 18 million pieces. With a stake of 10.43% in the total
leather exports of India, leather garments sector ranks third in export in the global market.
LEATHER GOODS AND ACCESSORIES SECTOR INCLUDING SADDLERY AND
HARNESS: With a staggering annual production capacity of 63 million pieces of leather
articles including industrial gloves, harness and saddlery items, this sector has a stake of
23.44% in the total leather export of India. This sector is the fifth largest global exporter.
Quality leather of cows, sheep, goats and buffaloes are used to manufacture a multifarious
range of small leather goods like purses, wallets and industrial gloves in clusters of highly
modernized units centered in Chennai, Kanpur and Kolkata. Armed with a highly skilled
workforce, modern equipments and machinery the products of these units mainly cater the
bulk exports to countries like Europe, USA, and Australia.
The main production hubs of the leather industry are located in Tamil Nadu (Chennai,
Ambur, Ranipet, Vaniyambadi, Vellore, Pernambul, Trichi, Dindigul and Erode), West
Bengal (Kolkata), Uttar Pradesh (Kanpur, Agra, Noida, Saharanpur), Maharashtra (Mumbai),
Punjab (Jalandhar), Karnataka (Bangalore), Andhra Pradesh (Hyderabad), Haryana (Ambala,
Gurgaon, Panchukla, Karnal and Faridabad), Delhi , Madhya Pradesh (Dewas) and Kerala
(Calicut, Ernakulam, Cochin).
Some of the Government initiatives to promote the leather industry include:






A dedicated focus on the leather industry under the Foreign Trade Policy.
The decision of the Government to implement a Rs 600 crore ‘mega leather cluster
development scheme for the 12th Five Year Plan (2012-2017)’ will definitely prove to
be a shot in the arm for the Indian Leather industry and increase its global competitive
edge, enhancing fundings to support export, market development, technical
advancement and HRD. According to the Department of Industrial Policy and
Promotion, “The concept of mega leather cluster seeks to address the constraints of
large infrastructure with integrated production chains in the country”.
De-licensing of the leather industry sector has enabled further expansion and easy
schemes to attract FDI.
Duty free import of the raw materials like rawhide and skin
Introduction of Duty Free Import Authorization (DFIA)
Simplification of the import/export regulations and smooth customs clearance.
After an eight months slump, the growth curve of the leather industry is soaring again as
evident from the fact that the total export value has increased by 4.25% touching US$ 26.26
billion from the beginning of 2013. The leather industry has plans to enhance export
potentials by US$ 7.03 billion by 2013-2014, which in turn will provide employment to an
additional one million people.
Where leather industry of India stands today, it may sound farfetched, but with proper
leverage, the Indian leather industry has the capacity to compete with the designer labels like
Gucci and Louis Vuitton in the near future.
Leather industry bounces back, expects
15% growth in 2013-14
Taps new markets, but also benefits through diversion of orders from China, where
costs are ballooning
T E Narasimhan | Chennai Business Standard November 18, 2013 Last Updated at 21:30
IST
After reporting zero or marginal growth over the past two years, the leather industry comprising thousands of small and medium enterprises (SMEs) - expects to close the current
fiscal
year
with
15
per
cent
export
growth.
It attributes the recovery to discovery of new markets following the adoption of a de-risking
strategy, and the diversion of orders from China to India as a result of China's ballooning
manufacturing
costs.
M Rafeeque Ahmed, president of the All India Skin and Hide Tanners and Merchants
Association, said he expects exports of leather and leather products to reach $5.75 billion in
2013-14.
The industry, which is among India's top 10 foreign exchange earners, reported 21 per cent
export growth in 2010-11. The year 2011-12 saw no growth, while 2012-13 saw three per
cent growth, to some $5 billion. "Now things are looking good and we will close this fiscal
with
around
15
per
cent
growth,"
said
Ahmed.
Though traditional markets such as Germany, Italy, Spain and Russia have declined by more
than 10 per cent, the US and Denmark have reported an increase of around 20 per cent, with
UK
coming
next
with
10
per
cent,
he
added.
The industry is looking at the Far East and African and South American countries for a big
export push, as those countries have great potential, said Ahmed. The domestic market is also
encouraging and entrepreneurs are paying more attention to it, he added.
Indian exporters have also benefitted from rising production costs in China, owing to wage
increases. If a pair of shoes is manufactured for $20 in India, the cost in China is around
$21.5,
according
to
Ahmed.
"Some cities in China, which traditionally housed the leather industry, are now moving
towards electronics. Orders are now moving towards India, which is good news, but the
challenge is to expand production capacity and improve quality," he said. Five years ago,
India's quality was superior to China's, but then China invested heavily in quality, he said.
A Srinivasan, a leading exporter from Chennai, notes that labour costs have risen in Tamil
Nadu too, and availability of power is also a problem. In Ranipet, Ambur and Vellore - the
state's major leather clusters - unscheduled power cuts last as long as four to five hours.
These push up power costs, since units have to be run on diesel generators.
Some units in Tamil Nadu - which accounts for 40-45 per cent of India's leather industry - are
now looking at other states such as Andhra Pradesh and West Bengal for future expansion.
Workers are more easily available in Andhra Pradesh and West Bengal, and at lower salaries,
said
Ahmed.
Workers' salaries, which used to be around Rs 5,000 a month, have increased to Rs 7,0008,000, while billing costs have not increased to the same extent. "We are ready to pay such
salaries also, but are still not able to get workers," said Bashir, who does contract work for
big
leather
companies
in
and
around
Ambur.
The depreciation of the rupee against the US dollar and the British pound (UK and the US are
key markets) may have benefited a few exporters for a short period, but it is an ominous sign,
Ahmed said, because it will make imported raw materials - on which the Indian leather
industry
is
heavily
dependent
more
expensive.
Raw material shortage is also a continuing problem, as large quantities of semi-finished
leather are exported to China and Italy. The Union government recently decided to accept the
view of the Council for Leather Exports that certification by the Central Leather Research
Institute be made mandatory for leather exports, so that they conform to the government's
regulatory policies. Ahmed hopes this will prevent clandestine exports of raw hides skins,
and more will be available to local tanneries.
3. Unlike many other production sectors in the rural/ semi-urban areas,
the leather industry has had to face very many additional aspects of social
engineering among the worker category, the continuing curse of the
influence of specific castes-religious combines among the employees
identified as a crucial factor in the societal fabric as a detriment to going for
rapid modernization matching with its link with the international markets
and its ‘state-of-art’ opportunities. To quote Sumangala Damodaran from her
PhD thesis for the New Delhi based Jawaharlal Nehru University in 2003, “…in
this traditional industry, internal institutional conditions tend to play a
negative and constraining role and it is in locations where modernization has
been adopted by breaking free of the ‘institutional straightjacket’ that it has
been possible to face challenges posed by the international market”. Thus
“The Calcutta leather industry found it difficult to switch to the lucrative
Western markets with the collapse of the Soviet and East European markets
because of institutional set-up and preferred to switch to low-value added
domestic markets. In Tamil Nadu in general, by contrast, the leather industry
was able to respond immediately to the same situation by tapping more
lucrative Western markets due to the more favourable institutional structure
that allowed it to shake off the stranglehold of retrograde institutions such as
caste and community”. In other words does modernization of the leather
sector also results in eradication of centuries-old and moribund social
structures as well in addition to the workers getting additional wages and
remuneration and higher living standards? In essence, “…Does orientation
and the availability of external markets contribute to the unequivocal upgradation of the production conditions…and if this has not happened, is this
due to the deadweight of internal conditions? How has the structure and
organization of the industry affected performance? What are the essential
tenets of a strategy of viable development for an industry such as leather and
leather products industry in India?” to quote the above author again.