Introduction: Leather Products and Footwear Manufacturing

India accounts to be one of the largest producers of Leather worldwide and has been in the market since ancient times. In Domestic as well as International Trade, the leather industry is one of the dominant players consistently. Another reason for its eminence is its contribution to Indian exports which account for more than 50 countries. The availability of fine craftsmanship and skilled labour that existed for ages is where leather holds its origination and has attained its glory. The textile and footwear industry have an exorbitant demand for leather as it gathers the most profit in these sectors. The Footwear Manufacturing Business, irrespective being leather or not, garners a lot of profits. India has modern manufacturing facilities. More than 95% of footwear produced in India is sold domestically. The shoe industry has advanced from manual shoe manufacturing techniques to automated shoe manufacturing processes. World-class equipment is installed in the footwear production divisions.

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Just like any other product in India needs to obtain relevant permissions before being established, so does a Leather Products and Footwear Manufacturing Business in India. This blog shall further lay down the relevant licenses and registrations before starting the business. 

Is A Leather Products And Footwear Manufacturing Business Profitable?

The Leather Business is one of the most profitable business ideas even today. From handbags, and clothes to furniture, leather has ruled markets all over the globe. India is also one of the top ten exporters of finished leather goods in the world and is expected to contribute much more to job growth in the future, directly employing over 20 million people and indirectly affecting more than 100 million more. Over $40 billion worth of leather is produced annually by the global leather industry. Everywhere in the world, leather products are in demand. The leather industry is growing as urbanization and population growth take place. Since people regularly utilize its products, the leather sector is profitable. The industry's reach is constantly growing as a result of its broad range of applications. 

There are several options available on the leather market. One of the factors contributing to leather's profitability is the multitude of uses for it. Shoes, apparel, handbags, accessories, and bags are just a few items made of leather.

Therefore, the leather industry involves trading where one can choose to be a maker, a retailer, or a distributor of anything made of leather. It's crucial to keep in mind that the business will require a lot of money and to launch a business in the leather industry, thorough research would be helpful. 

What Is The Present Industry Scenario Of Footwear And Leather Industry?

During 2020–21, exports of leather, footwear, and leather goods reached $4.03 billion. The various export categories for leather, footwear, and leather goods, together with each category's share of exports, are as follows:

• Footwear - 46.2%
• Leather Accessories - 25.2%
• Finished Leather - 6.7% 
• Leather garments - 14.4% 
• Saddlery & Harness - 4.6%

What Licenses Are Required To Start A Leather Products And Footwear Manufacturing Business?

The Ministry of Commerce and Industry governs and lays down the regulations regarding leather products and footwear. They are as follows-

• Registration and Incorporation of a Company

Before producing any goods in India, a manufacturer must register their business in accordance with the rules established by the Ministry of Corporate Affairs. This is the first and most important stage. A business can register as either a Private Limited, Limited Liability Partnership (LLP) or a One-Person Company. Additionally, a firm must be incorporated in accordance with the 2013 Companies Act prior to beginning activities. A firm acquires a legal identity through incorporation.

• GST Registration

A specific identification number from the appropriate tax authorities is required for any business organization that registers under the GST Law in order to collect taxes on behalf of the government and claim input tax credits for taxes paid on its inward supplies. Without first registering, neither a person nor a business can claim an input tax credit for taxes that they have already paid on their own behalf. It is legally permissible for a firm to provide products and services if it has registered for GST.

• Trade License

A trade license is a document or certification that gives a company permission to launch a business in a certain location. It makes certain that, whether conducting business or engaging in commerce, all safety guidelines established by the State Municipal Corporation are fulfilled. It protects the locals from any health dangers.

• MSME Registration

Thanks to MSME Registration, the Micro, Small, and Medium (MSME) sectors gain access to a number of government programs intended to aid in their growth. India is a developing country whose economy is primarily dependent on the MSME sector. These industries develop in tandem with the country's economy. Small businesses are another name for these companies.

• Trademark Registration

When a company registers its trademark to stop the market imitation of the made glass product, the need to rebrand is avoided. Furthermore, trademark registration in India is required if you want to protect your rights and intellectual property.

• ISI Certification

All shoemakers will need to obtain a BIS certificate, and all footwear must adhere to the relevant Indian Standard and bear the Standard Mark (ISI Mark) under a license from the Bureau, according to a recent announcement by the Department for Promotion of Industry and Internal Trade (DPIIT). Selling leather or other material-made shoes without the ISI Mark is prohibited. No producer will be able to legally make footwear under this mandate without BIS certification. BIS Certification is required for footwear made from leather and other materials, following a DPIIT, Ministry of Commerce and Industry (Quality Control) Order.

• Pollution Control Board Certificate

As leather production requires a lot of chemical input and water, it is frequently linked to high levels of greenhouse gas emissions, solid waste, and organic waste loads in wastewater. Pre-tanning and tanning processes account for 57% of the industry's water use and almost 90% of tannery pollution. The presence of sulfides, chlorides, sulfates, and chromium, as well as a high concentration of organic matter and solid wastes, are the key characteristics of the pollution load. It will only be described as the environmental scenario for these stages of leather production because of its predominance in this problem. Hence, it is necessary to obtain a PCB License before starting a manufacturing business of leather.

• Import-Export Code (IEC)

India is one of the largest exporters of Leather all over the world and in order to facilitate the process, it is essential to have an Import-Export Code. An IEC is a 10-digit code that is obtained from the Directorate General of Foreign Trade (DGFT) and shall be essential to facilitate trade between nations. 

Conclusion

The Indian leather industry is able to meet growing consumer demand for new product offers and trends because of its capacity for rapid growth and development and its emphasis on luxury. With creative products like purses and backpacks made from unique skins, leather makers are improving their reputation in niche sectors. With its renowned handbags, Coach is expanding into high-end accessories, which calls for a variety of exotic skins and presents opportunities for tanneries that specialize in these tiny but valuable niches. Hence, obtaining licenses appropriately shall further facilitate the growth of the business and avoid any future issues.

The Indian Footwear and Leather Development Programme (IFLDP) with an outlay of Rs. 1700 Crore through March 31, 2026, has been approved by the Ministry of Commerce and Industry. IFLDP seeks to create infrastructure for the leather industry, handle environmental issues unique to the industry, encourage new investment, create jobs, and expand leather production. The Indian Footwear and Leather Development Programme is briefly explained in this article (IFLDP).