Indian shoe exporters affected by rupee appreciation
Figures show that leather and leathergoods exports fell 9% year-on-year to $3.3 billion between April 2009 and March 2010, although leather garment exports bucked the trend. Finished leather exports fell 12% to $605.7 million, while leather footwear exports fell 6.2% to $1.2 billion, footwear component exports fell 17.3% to $206.7 million and leathergoods exports dropped 13.2% to $760.6 million.
Currency fluctuation is reportedly adding to the problems Indian leather exporters have been facing since the start of the economic downturn in 2008. According to The Financial Express, ongoing economic problems in Europe are taking their toll on the country’s leather manufacturers. The rupee has appreciated against the euro, making it difficult for producers to maintain profitability. Small businesses appear to be the most negatively affected so far, it reports.
Leather exports totalled $3.6 billion in 2008-09, up 1.4% compared with $3.5 billion in 2007-08. However, the annual growth rate prior to this had been significantly higher. Decreased demand in Europe, its main export market, and the US has made it difficult for some leather manufacturers to stay in business. And although the sector seemed to be on the road to recovery in recent months, the latest wave of crises has brought the problems back to the surface again. Europe accounts for around 63% of Indian leather exports, according to the Indian newspaper.
