Competitiveness of Leather and Leather Product Exports

Abstract

Kanpur Cluster, despite being one of the oldest leather clusters of India with availability of all factors of production, is behind Chennai and Kolkata clusters in terms of revenue earned from export of leather and leather products as well as per unit realization in most of the leather products category. The current study focuses on studying export competitiveness of Kanpur cluster vis-a-vis Chennai and Kolkata. The paper has analyzed former cluster on Porter's framework and has brought forward the factors that result in low export performance of the cluster and the steps required by state policy-makers and exporters to improve the export competitiveness. The research design of present study is exploratory followed by descriptive in nature. The sampling technique used is judgmental based on opinion of experts and researchers of the field. The data are collected from exporters of Kanpur through structured questionnaires. The exporters covered by the study account for 80 per cent of export revenue in leather sector from Kanpur. In- depth interviews with government officials and office bearers of organizations like FIEO, Council for Leather Exports were conducted to collect the data. Researchers in consultation with industry experts and literature review determined the factors that have impact on export competitiveness. This study found that lack of external factors like transport infrastructure, power supply, image of State, recession in world market and insufficient State Government support in terms of policy and internal factors like high per unit manufacturing cost, lack of coordination among industry players, low use of technology (Modern Machines) and insufficient marketing activities, are the major reasons for low export performance of the cluster.