A Study on Environmental Compliance of Indian Leather Industry & Its Far-Reaching Impact on Leather Exports

Abstract

Indian Leather industry is recognized as one of the most promising foreign exchange earning sectors since early '70s of the previous century. The industry was hard hit by two consecutive foreign environment-bans since 1989. Along with that, few domestic environmental regulations also resulted into closure down of a number of leather tanneries in this period. However, the government intervention and the successive compliance measures adopted by the firms ultimately helped the industry to gain momentum in its export sector. This paper analyses the far reaching impact of these environmental regulations on export sector of Indian Leather Industry. Whether this boost in leather export marks a trade off relation between environmental quality and volume of exports is a matter of debate, attempted to be resolved here. This paper, within the limitations of data availability regarding environmental statistics, has determined a positive relation between environmental quality and volume of leather exports and justified that instead of Pollution Haven Hypothesis, Indian Leather Industry rather confirms Porter's Hypothesis.