Updated on May 06, 2025 02:36:56 PM
The use of leather among people has been used since over the past 7,000 years for the crafting of bio-based leather goods obtained from the hides and skins of various animals such as goats, buffaloes, cows, sheep, rhinoceros, etc.
The leather based goods have been used for the production of clothing, furniture, accessories and industrial applications. The undertaking demand for leathers among consumers due to its appealing outlook, aesthetic appearance and durability keeps the glory among passionate leather models.
The leather industry is a labor-intensive industry, offering 4 Mn jobs to people, particularly who belong to weaker sections of the society. Currently, India is the 2nd largest producer of leather garments followed by the third largest exporter of saddlery and harness and therefore, India is considered as the 4th largest leather producer in the world.
Indian footwear is popular among all the countries in the world, being the 2nd most producer and consumer with a growing CAGR of 8% which is valued at US$4.3 Bn as the market size in the world. Currently it accounts for only 9% of the world’s total production.
Apart from being a paramount production of shoes, the export share of leather shoes of the total world’s exports is accounting for 45.2% in FY 2022-2023. Further, the export of finished leather is registered at 8.19% followed by non-leather footwear at 5.42% in the same year.
Leather industry has been gaining its strong mileage from micro, small and medium units which is the hidden cause for the emergence of the leather goods industry. The major participants for marketing Indian shoes commodities include USA, UK, Germany, France and Italy.
To improve the condition of the Indian leather industry, Solidaridad Regional Expertise Centre (SREC) and the Council For Leather Exports (CLC) have collaborated to improve dometic an international market for leather industry by signing a MoU at Delhi in December 2023, that will be effective from Jan 2024 till December 2028.
The government of India is continuously monitoring their schemes, reforms, initiatives and policies to increase the relative revenue generation in the leather sector, reviving facilitation of revenues in the economy.
One of the major program initiated by the government of India is the Indian Footwear and Leather programme which aims to develop the infrastructure of the leather industry by addressing the related concern for the environment, specific to the leather industry.
To participate in FDI in the leather industry, applicants are required to register under the Foreign Investment Facilitation Portal (FIFP). The procedure can be puzzling for any newcomer applicant since it incorporates several terms and conditions without rendering direct access to portals that can generate approvals for FDI.
Table of Content
The objectives of FDI in leather industry which are as follows:
100% FDI is allowed in leather industry under automatic route.
Many documents are required for FDI in the leather industry which are as follows:
Following are the procedures which required at the time of FDI in the leather industry:
Applicants must fill out the online application form along with the relevant documents for making out the proposal for Foreign Direct Investment
Filing the proposal for FDI online within two working days, DIPP then will address the concerned administrative ministry to transfer the proposal of applicants electronically
Collect all the requisite documents for continuing the process of the investment proposal. In case documents may be found incorrect, applicants will be held responsible in case of any deviation found.
The DIPP along with potential authorities will process the application internally and recognize various ministries for adding several comments such as the Ministry of Home Affairs, Reserve Bank of India, Ministry of External Affairs, Ministry Of Finances, etc.
There are conditions tapping for the procedure of FDI approval which must be understood by investors.
The key advantages for investors under leather industry in India are as follows:
The benefits which has derived from leather industry under FDI (Foreign Direct Investment) is as follows:
FDI in the leather industry in India is the thriving sector, producing a large number of leather made footwears, raw leathers and finished goods. It unlocks the full potential of the leather industry, thereby increasing capital infusion, fosters innovation, technological transfers, and more sustainable future.
There are various other schemes, reforms and initiatives which are continuously monitored by the government bodies and regulatory authorities to enhance the performance of the medical startup revolution in India.
Several other factors to consider for investors while investing in leather industries are listed below:
Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions
Yes, it is mandatory for obtaining BIS ISI registration certificate for manufacturing footwears so that the footwears manufacturers won't be prone to certain constraints while manufacturing footwears. Without prior approval of such license, it is considered illegal attempt to manufacture any footwear products.
The leather industry contributed to less than 1% and footwear industry has currently contributed to 2% of the revenue.
The market size of the leather industry in India is estimated to reach about US$ 85.91 Bn by the year 2024 with a CAGR of 8.13% in the year 2024.
No, 100% FDI is allowed under automatic route.
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