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13) Cluster competitiveness, cluster specific business environment, nature and impact of cluster specific
government policies
Place: Kanpur
State : Uttarpradesh
History:
History of this cluster dates back to 150 years ago, when the British set up
factories for production of shoes and saddler items to meet military
requirements. During World War I, the existing capacity was inadequate to
meet the increasing demands. Local entrepreneurs were encouraged to set up
manufacturing facilities for these items. World War II further motivated the
growth of these industries, and in due course of time Kanpur became a
prominent centre of production of leather & leather products.
Tannery - a place where animal hides are tanned; the workshop of a tanner.
Demand has been impacted due to the weak consumer sentiment in the European
Union (EU - the biggest destination of India’s footwear exports) and a significant drop in
the value of the British Pound (GBP) following the vote on referendum to exit the
European Union, according to an ICRANSE 0.45 % report
Lack of hides due to cow vigilantism - As a result, some local leather goods producers have
started importing hides from outside India. “People that have been using Indian leather want to be
sure that their factories run, so they are importing more,” said Ahmed. Bottlenecked supply has
also created the problem of higher prices for raw materials, which has been compounded by the
prices for chemicals also having shot up.
Over the past year, India’s GDB has sunk by a tenth to 6.1%, costing an estimated 1.5 million
jobs. In Uttar Pradesh’s Kanpur- Unnao industrial cluster, around half of its 402 registered leather
businesses – making up roughly a third of India’s leather exports – have closed over the past
year, Mukhtarul Amin, CLE chairman, told Bloomberg in December.
Another huge part of the problem for leather exporters as far as GST is concerned is that there
has been a delay in refunds on taxes already paid on imports, leaving them out of pocket with
little working capita
“The tanning industry is known to be very polluting, especially through effluents high in
organic and inorganic dissolved and suspended solids content,” noted this 2007 report. “A
significant part of the chemical used in the leather processing is not actually absorbed in the
process but is discharged into the environment.”
http://www.indiaspend.com/cover-story/the-slow-death-of-kanpurs-leather-
economy-and-ups-job-crisis-69555