Modi govt's crackdown on Muslim-run leather units dents exports, hits jobs

Agencies
October 3, 2017

New Delhi, Oct 3: A government crackdown on Muslim-dominated abattoirs and the trade of cattle dragged down India's exports of leather shoes by more than 13 percent in June, as leading global brands turned to China, Bangladesh, Indonesia and Pakistan to secure supplies.

The drop in exports of shoes and leather garments comes as a setback for Prime Minister Narendra Modi, who has sought to create millions of jobs by more than doubling the leather industry's revenues to $27 billion by 2020.

Emboldened by the victory of Modi's Bharatiya Janata Party (BJP) in the 2014 general election, Hindu hard-liners, who consider cows sacred, became more assertive in their calls for a clamp-down on both the meat and leather industries, run by Muslims, who make up 14 percent of India's 1.3 billion people.

"The writing was already on the wall," Nazir Ahmed, CEO of shoemaker Park Exports, told Reuters by phone from Agra, a shoe-making hub and home to the Taj Mahal. "We have killed the goose that laid the golden egg."

India, the world's second-biggest supplier of shoes and leather garments, exports nearly half its leather goods, with overseas sales estimated at $5.7 billion in the 2016/17 fiscal year to March, down 3.2 percent from a year earlier. Footwear exports fell more than 4 percent in April-June, to $674 million.

Informal sector

In March, after being appointed chief minister of Uttar Pradesh, India's most populous state and a major leather exporter, Yogi Adityanath, a firebrand Hindu monk, ordered a closure of abattoirs operating without licenses.

Slaughterhouse owners complain that much of India's meat and leather trade takes place in the informal sector, and it's hard to get licences, especially for smaller units.

In May, citing cruelty to animals, the federal government banned the trade of cattle for slaughter, and restricted livestock sales only for agricultural purposes such as ploughing and dairy production.

But the country’s top court overturned that order, citing the hardship the ban had caused.

That has not brought relief as repeated attacks on trucks carrying cattle still rankle the leather trade.

"The supreme court has allowed the resumption of trade for cattle, but the ground reality is that cow vigilante groups continue to be active and no one wants to risk his life by transporting cattle," Ahmed said.

Deterred by a clutch of measures that squeezed the supply of leather, a key raw material, brands like H&M, Inditex -owned Zara and Clarks, cut back their orders to India, said M. Rafeeque Ahmed, a leading shoe exporter from the southern city of Chennai and former president of the Federation of Indian Export Organisations.

"We lost orders because our buyers were sceptical of our ability to meet their requirements. Instead, most buyers moved to rival suppliers in Asia and southeast Asia," he said.
A spokesman for India's trade ministry declined to comment.

Earlier this year, a finance ministry report said India should sign more free trade agreements and make tax and labour reforms to drive leather exports, which offer "tremendous opportunities for (the) creation of jobs."

The industry is also grappling with a Goods and Services Tax, introduced in July, which has pushed up production costs by 6-7 percent, exporters said.

Nowhere to hide

The crackdown also hurt day-workers employed at shoe and garment making units and hit leather supplies, forcing manufacturers to import hides from the United States, Australia, and some European nations, raising the cost of production and squeezing margins.
Many tanneries, as a result, have run out of leather.

"My business has come to a standstill because I don't have any inventory at all. Most large shoemakers are importing hides now," said a tannery owner, who asked not to be named so as to avoid retaliation from cow vigilante groups.

Nearly a third of the roughly 3 million-strong workforce, mostly lowly-paid casual workers employed in the leather sector, have lost their jobs in the past six months, according to six shoemakers and two tannery owners interviewed by Reuters for this article.

Since most Indian states have outlawed cow slaughter, the supply of leather largely comes from the legal slaughter of buffaloes whose skins are used in many leather goods.

"Everyone must abide by the rule on cow slaughter and respect sentiments, but by choking the supply of other animal hides, we have nearly killed a thriving industry," said Ahmed of Park Exports.

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News Network
November 18,2024

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Mangaluru: The Ullal police have arrested Manohar, the owner of Vazco Beach Resort, and its manager Bharath in connection with the drowning of three college girls from Mysuru at the resort’s swimming pool on November 17.

City Commissioner of Police Anupam Agrawal confirmed the arrests, stating that a case has been registered under Section 106 of BNS. The bodies of the victims, all in their twenties, have been handed over to their parents. The women had arrived at the resort for a weekend getaway on November 16.

Following the tragic incident, the resort was sealed by officials led by Mangaluru Assistant Commissioner Harshavardhan. The trade license of the resort, issued on June 13, 2024, has been suspended, and the tourism department has temporarily revoked the resort's registration. These actions prohibit the resort from engaging in any tourism-related activities until further notice.

Someshwara TMC Chief Officer stated that the suspension was due to the resort's failure to implement adequate safety measures, which resulted in the loss of three lives. Further investigations are underway.

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