Challenges faced by the Indian Tanneries: • The cost of production per unit area of finished leather has increased substantially due to legal norms taken to safeguard the environment • Due to various new state laws, the production capacities of various units have been stopped from expansion despite complying with the fundamental laws • There is a surge in the demand for raw skin, hides and semi-finished leather that is not being able to fulfill currently • Small tanneries are still suffering from primitive and outdated technology • Despite having built certain industrial parks in the country, many states are devoid of the infrastructure and resources needed to carry out all the tanning processes efficiently • Poor capacity utilization and stagnant …show more content…
Further, production in the organized sector is divided into large, medium and small scale sectors. Organized sector It refers to the factory mode of production using modern technology and incorporating a relatively high degree of mechanization. Large and medium sized units in the organized sector are known as DGTD units, since they have to be registered with the Directorate General of Technical Development. With command over technology, resource, management, finances and marketing expertise, the organized sector is growing rapidly and now accounts for major share in the production and export of finished leather and leather products. Unorganized sector The main characteristics of the unorganized sector of leather industry in India are small scale operation, simple and labor intensive technology, unregulated and competitive markets, low barriers to entry and family ownership of enterprises. Most of the unorganized or cottage or traditional leather units are rural based and are known as Khadi and Village Industries Centre units, since the Khadi and Village Industries Commission is responsible for the development of the village leather