An Expository Analysis on Environmental Compliance of Indian Leather Industry

Indian Leather industry is recognized as the most promising foreign exchange earning sector since early ‘70s of the previous century. In terms of percentage share, leather export earnings accounted for 8% of the total foreign exchange earning sector, even in 1998-99, when the first environmental ban1 was imposed by its major export absorbing country, Germany. However, even after ten years (CLE, 2008-09) with annual earnings of 7 billion USD, the Industry has reached such a stupendous height of success, which made it the 6th largest foreign exchange earning country in the world. On one side, the export generating potential to boost the growth rate of the economy and on the other side the pollution intensive nature of the industry – has made this sector distinct. The Indian Leather Industry has been hit by several environmental bans and regulations since’90s. The ways of compliance adopted by Indian Leather sector has helped the industry in restructuring its technology and consequentially an apparent growth in exports sector has been experienced. The export earning of the Indian Leather and Leather Manufacture has almost quadrupled from 1987-88 to 2010-11. From 964.4million US$, the export earning reached to 3789million US$ during this period. This stupendous performance challenged many so called hypotheses which show a trade-off between environmental compliance and export competitiveness (Chakraborty, 2011). This paper will make an expository analysis on how that environmental compliance affected Indian Leather Industry.