The leather industry can contribute to the growth of an economy in a number of ways. Here are some ways in which the leather industry can contribute to economic growth.
Employment generation: The leather industry is a labor-intensive industry, and it can provide employment to a large number of people. In developing countries, the leather industry is an important source of employment, particularly for those who are unskilled or semi-skilled. For example, in India, the leather industry employs around 2.5 million people directly, and an estimated 10 million people indirectly.
Export earnings: The leather industry can contribute to the growth of an economy by generating export earnings. Many countries, especially developing countries, rely on exports to boost their economic growth. The leather industry is a major contributor to exports in many countries. For example, in India, the leather and leather products industry is the second-largest export earner, after the textile industry. In 2018-2019, India’s leather and leather products exports were worth around $7.6 billion.
Value addition: The leather industry adds value to raw materials such as hides and skins by converting them into finished products such as shoes, bags, and clothing. This value addition helps to increase the overall value of the products, which can contribute to economic growth.
Linkages with other sectors: The leather industry has linkages with other sectors of the economy, such as the agriculture sector (which supplies hides and skins), the transportation sector (which is involved in the transportation of raw materials and finished products), and the retail sector (which sells the finished products). The growth of the leather industry can therefore lead to the growth of these sectors as well.
Innovation and technology: The leather industry is constantly evolving and innovating, with new technologies and techniques being developed to improve the quality and efficiency of production. This innovation can help to increase the competitiveness of the industry and contribute to economic growth.
Infrastructure development: The leather industry can also contribute to economic growth through the development of infrastructure such as roads, ports, and warehouses. This infrastructure is necessary for the transportation of raw materials and finished products, and it can help to improve the overall efficiency of the industry.
Tax revenues: The leather industry can also contribute to economic growth through the payment of taxes. Taxes paid by the industry can be used by the government to fund public goods and services, which can help to improve the overall standard of living in a country.
To illustrate the ways in which the leather industry can contribute to economic growth, let’s consider the example of India. As mentioned earlier, the leather industry in India is a major contributor to exports and employment. It is also a major contributor to value addition, with the value of leather and leather products exports increasing from $3.9 billion in 2010-2011 to $7.6 billion in 2018-2019. The leather industry in India also has linkages with other sectors, such as the agriculture sector (which supplies hides and skins) and the retail sector (which sells finished products). The industry is also constantly innovating and adopting new technologies, which has helped to improve the quality and efficiency of production. Finally, the leather industry in India also contributes to the development of infrastructure and the payment of taxes, both of which can help to boost economic growth.