Export of Leather Goods

8/2/2019 Export of Leather Goods

1/12

qwertyuiopasdfghjklzxcvbnmqwerty

uiopasdfghjklzxcvbnmqwertyuiopasd

fghjklzxcvbnmqwertyuiopasdfghjklzx

cvbnmqwertyuiopasdfghjklzxcvbnmq

wertyuiopasdfghjklzxcvbnmqwertyui

opasdfghjklzxcvbnmqwertyuiopasdfg

hjklzxcvbnmqwertyuiopasdfghjklzxc

vbnmqwertyuiopasdfghjklzxcvbnmq



hjklzxcvbnmqwertyuiopasdfghjklzxc

vbnmqwertyuiopasdfghjklzxcvbnmq



hjklzxcvbnmrtyuiopasdfghjklzxcvbn

mqwertyuiopasdfghjklzxcvbnmqwert

yuiopasdfghjklzxcvbnmqwertyuiopas

PROJECT REPORT

ON

EXPORT BUSINESS OFLEATHER

PRODUCTS TO GERMANY

Submitted By:

Parag Saini

Ankit Aggarwal

Priya Singh

Mayank Partap Singh

Itinder Singh


2/12

INTRODUCTION

There came the long awaited dusk to the complacence of the Indian manufacturers (the

village leather industry in particular) When the long slammed doors of global markets were

opened to the leather industry. As already project by various economic wizards, the leathermanufacturers met challenge with a renewed vigour and started capturing markets like

Germany, U.S, Italy, U.K., and France. The very fact that a major market like Germany has

been chosen to build up positive image for the Indian leather products and to promote joint

ventures adds one more feather in the cap of leather industry in presenting a strategy so

remarkable

INDIA EXPORT OF LEATHER

The export of leather and leather products in total during 2006-07 has reached 2849.61

millions U.S. $ as against 1558.60 millions U.S. $ in 1994-95 registering an increase of16.59%.In 2001-02 export has reach 1.93 billion U.S. $ and in year 2005-06, the Indian

export of leather goods reached to 2648.14 million US $. In 2006, estimated exports stood at

US$112 billion and imports were around US$187.9 billion. Textiles, leather products etc. are

major export commodities. India's most important trading partners are the United States, the

European Union, China, and the United Arab Emirates

To give a brief idea of the Indian exports of leather products to the world, we have prepared

this table showing you the country wise exports of Indian leather products on the basis of

percentage, FOB value and units exported

Germany has been the principal market for the Indian leather and leather products and

continues to hold its position at the top commanding about the 20% share of the total Indian

leather and leather products. Largest market for Indian leather industry is continuously

nurtured and developed

FORMATION OF COMPANY

Our company is among exporters of exquisite leather bags, briefcases and small leather

goods. We are suppliers to some of the famous brand names across Europe.

Our Company Name is EXPORTS

Its a sole proprietary business organisation.

STATURATORY REQUIREMENTS

GET IEC NUMBER:- To get registered with the DGFT (Director General of Foreign Trade), Ministry of

Commerce, Government of India


3/12

DGFT provide exporter a unique IEC Number. IEC Number is a ten digits coderequired for the purpose of export as well as import. As No exporter is allowed to

export his good abroad without IEC number

REGISTRATION WITH EXPORT PROMOTION COUNCILPROCESS AT COUNCIL FOR LEATHER EXPORTS FOR REGISTRATION:-

1. Membership application form

2. Membership fee through Account Payee Cheque/DD (in favour of COUNCIL FOR

LEATHER EXPORTS)

3. Export Performance for the last three years duly certified by Bank / Chartered Accountant

4. A self-certified copy of the IEC Number issued by the licensing authority concerned.

After becoming a member of the Council, an applicant shall have to produce the followingdocuments for issuance of RCMC.

Councils services to the Indian Leather Industry:

o Collecting, Collating and disseminating world market intelligence.o Updating the information on global trends in fashion and design, product

development.

o Dissemination of information of commercial and technological nature throughseminars and magazines.

o Organizing participation of Indian exporters in international fairs and buyer-sellermeets.

o Sponsoring sales-cum-study teams and trade delegations.o Inviting foreign experts for providing technological inputs to Indian leather exporters.o Organizing international leather fairs in India

Councils services to overseas buyers include:

o Serving as a focal point for disseminating information on Indian manufacturers andexporters.

o Organizing visits of buyers delegations dealing with trade information.o Liaising with various international organizations dealing with trade information.o Providing trade and commercial information on Indian leather industry

It helps in finding customers, conducting exhibitions and many other things

APPLY FOR THE PAN CARD REGISTRATION WITH INCOME TAX AUTHORITIES SELECTION OF BANKI would select CANARA BANK, As the Bank has theexpertise in handling project exports of goods and services. Excellent worldwide


4/12

correspondent relationship and have the capability to handle any export, import,

remittance and related transactions anywhere in the world and in any currency.

PRODUCT DEFINITION AS PER ITC HS CODE

ITC HS code for products with outer surface of leather, of composition leather or of patent

leather is

42029190

42 stand for Chapter 42:

Articles of leather; saddlery and harness; travel goods, handbags and similar containers;

articles of animal gut (other than silk-worm gut)

4202 stand for Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels,

spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters

and similar containers; travelling-bags,insulated food or beverages bags

PRODUCT RANGE SELECTION -

We are marketing a range of exquisite Leather accessories for men. To start with this range

would include premium quality leather belts, leather wallets, Portfolios (Mens Office Bags)

and leather key chains.

Our product range would include:

a} Leather Belts

b} Leather Wallets

c} Leather Portfolios

d} Leather Key Chains

e} Handbags / Business Cases

f} Travel Bags

We chose these products out of the entire leather accessories range because they are the

highest selling products in the order. Although, the ladies purse segment also makes very

high sales, if we were to survive in this segment, we would have to keep a very large variety

and mix of designs, which is not possible for us as a new entrant in the market. Hence we

have kept limited variations and designs to start with.

The things which wie will be taking care to select the range for our products are as follows:

a} It should be distinctive and easily remembered.


5/12

b} It should not offend any particular section of the society.

c} It should depict the features of the product

MARKET SELECTION

Leather wear in India is basically for export though a very small quantity is available in the

local market mainly in the north where the weather is conducive to leather wear and also in

five star hotels where the tourists from all over the world buy leather garments. Most of the

garments sold are designed as per international standards and the buyers are mainly

foreigners who find the locally made garments very fashionable. The main leather garment

centres for manufacture are Bombay, Kanpur, and Madras

GERMANY MARKET:-

Germany, which is the single largest buyer of Indian leather items, with a 14.3 per cent

share, increased its imports by 7.2 per cent, buying more of footwearleather and non-

leatheras well as saddler and harness. Exporters of other leather items such as garments,

leather goods, footwear components and leather, also increased over a period of time. Leather

goods and garments are big business all over the world. These are being manufactured and

exported by India and the Indian leather industry is poised to take the international markets

by storm

German consumers are practical and usually feel there should be a clear reason for replacing

luggage. They regard function, quality, comfort and a competitive price as most important,

but fashion is becoming more of an issue when buying luggage. However, in handbags, belts,

cross over bags and sports bags, design, fashion and brand awareness are still the most

important, especially among women

This market growth will be mainly driven by:

a)More stimulation of fashion-based purchases by a celebrity-driven mass media.

b) The continued interest in lower-priced fast fashion items that try to copy luxury brands and

consumers who are no longer ashamed to buy or admit to owning such products.

c)New markets for men and teens. For example, Leather pouches for men, instead of

briefcases, have become more popular. More variety in girls purses in different fabrics is

expected


6/12

German luggage and (leather) accessories consumption by product, % value 2006

SELECTING A SUITABLE TRADING PARTNER

This is a very important part of the export process. The relationship we can establish between yourself

and your partner is as important as finding a contact that is suitable for you in terms of the range of

products that we can supply. The essential element of any trading relationship is trust.

The best way to find a trading partner is usually to contact the main trade sources.

The German Leather Goods and Luggage Association and the German Leather IndustryAssociation are important contacts.

The best place to meet potential trading partners is at atrade fair, such as theInternationalLeather Goods Fair in Offenbach.

Participating in trade fairs can be expensive, so it would be better to first visitant exhibition a few

times before making a commitment. During a visit you can extensively look around at the stands of

the main players and get a better idea of the latest fashions. At trade shows we have an opportunity to

talk to potential partners on a face-to-face basis and better judge whether we would like to work with


7/12

them. We could also identify potential partners from the exhibition website beforehand or from a

catalogue. When selecting them (e.g. importer or wholesaler), we will try to find out:

a)What type of luggage or accessories they sell (focussed on comfort, material or fashion).

b)To which target groups they sell.In which areas they are well represented in their country. If they

are exporting, to which other EU countries they sell.

d)To whom they sell e.g. small or large retailers, department stores, buying groups etc.

PROMOTIONAL LITERATURE :

To develop a business relationship with buyers are to make a directapproach to wholesalers or majorretailers.

In Germany, many business people still prefer a formal style of communication, both in the way apresentation is put together, and in the way contact is made. A very aggressive price driven approach

will not be effective, although price is very important in the German market.

TRADE FAIRS PROMOTION(Advertising in trade magazines can sometimes be an effective means of

reaching a small target group)

Having a website

Buyer Selection:-

Who are the target customers for leather products?

Our organization is a premier design house for leather goods, gaining acceptance even in the

highly competitive western markets.

The target market consisted of people aged between 20 and 50 years, belonging to high

income households, who traveled frequently, often internationally; and insisted on high

quality products. Our preferred target buyers in domestic and international market will be,

European and American distributers Young and middle aged working class people (between 20 and 50 years)

Entering The Market:-

Initial Planning:-


8/12

We will enter into the market fulfilling export contracts to selling through distributorsand then through high-fashion retail chains.

After few year we will start wholly-owned concept stores. This was followed by tie-ups with retail chains. (Like Westside, Shoppers' Stop,

Landmark, etc.)

Trade fairs or trade associations:-

Trade fairs or trade associations are the best starting point to get into contact with different

companies in the distribution channel that could be interested in new suppliers.

Creating a strong Distribution Network :-To enter into leather product market ,first of all

there is need of strong distribution channel. the most important distribution channel forleather goods is the wholesale channel. Distribution channel is formed by domestic

manufacturers. Importers-Exporters ,wholesalers, domestic manufacturers are part of this

distribution channel.

Our organization will focus on both Domestic Distribution and International Distribution.

Both points are discribed as following,

1. International Distribution:- Initially we will focus on international distribution, anexclusively export-oriented leather product company, fulfilling orders from European

and American distributors. It will concentrate on taking small orders and fulfillingthem to high quality standards and delivering on time. This will be prove crucial in

building its reputation among high-end overseas customers and in gaining their initial

goodwill.

2. Domestic Distribution:- After few years company will start its retail operation inIndian market. A good thing about Indian leather product market is that there were no

major competitors in the same category, so we will get a chance to exploit the huge

opportunity.


9/12

GETTING ORDER:

1. Open your office in that country to whom you intend to export your products. It is a great

way to market your products in that country.

2. Another way of export marketing is appointing your agent or a distributor of your

products in the importing country.

But finding an agent or distributor might not be possible for you. As for that purpose you

have to do a lot of work & research to find an honest agent or distributor.

3. Third way of export marketing is to attend trade fairs in different countries.

It is also a costly way, as we have to arrange a lot of things like tickets, purchase a place to

display products, arrange stock of products to display etc. to attend any trade fair.

4. The fourth way of export marketing is to give phone calls to the importers of products in

different countries by colleting the list of importers from the export development

authorities. But when we call them they will be asking about your products catalogue.

Making phone calls to the hundred of importers and sending them products catalogue is too

much expensive.

We can use the following e-commerce ways to market your products worldwide in very cost

effective way:

1. Open a web site of our company to display company profile and products on it. This will

help to display all products with their complete specification. Anyone interested in

products may get knowledge of products and company by simply visiting your web site

rather sending catalogue to them.

The following are the benefits that you can get from opening a web site.

(i) Promote/display products and services with complete details.

(ii) Provide online quotations to buyers.

(iii) Advertise products worldwide at less expense.

(iv) Obtain feedback from customers/importers.

(v) Improve customer services by providing same day answers to online inquiries.

2. Another way to market products by using Internet is use of Business to Business (B2B)

web sites. There are many B2B web sites that give opportunity to market products


10/12

worldwide at no expense. B2B web sites are providing great services for importers and

exporters to have their company's products and profile online.

STEPS FOR EFFECTIVE SHIPMENT:

Choose the right size shipping container Choose sustainable packaging materials Use more durable packaging materials Send items in bulk Choose an eco-friendly carrier

The best effective way for our shipping method is:

Shipping by ocean carrier

The option of shipping carrier is way less expensive than air shipment. People who are

wishing a cost-effective way for international shipping, can send their goods by ocean

carrier. Wecan also share the container of other customer to save money, if ourshipment

does not fill an entire container. It is beneficial to both the customers.

We can also hire a logistics company. These companies have ongoing service contracts with

air cargo routes, overland freight handlers as well as ocean carriers. By this way we may be

able to minimize your upfront costs.


11/12

Incentive to Leather Sector in the Foreign Trade Policy 2009-14

1. 1. Under Focus Product Scheme:

Duty Credit Scrip incentive to the leather products and leather footwear sector @ 2%of FOB value of exports.

2. Leather sector included under Status Holder Incentive Scrip Scheme for grant of 1%

additional scrip.

3. Re-export of unsold hides/skins, imported under bonded warehouse, allowed on

payment of 50% of stipulated export duty.

4. Under Focus Market Scheme:

Exports of all Leather products and Leather Footwear to notified 110 countriesunder Focus Market Scheme in the Foreign Trade Policy 2009-14 are entitled to Duty

Credit Scrip incentive @ 3% of FOB value of exports.

5. Benefit of 2% Interest Subvention allowed to SMEs.

Leather and Footwear

1. Additional 2% bonus benefits under Focus Product Scheme.2. Finished Leather exports to be incentivized under Focus Product Scheme.3. Duty free import entitlement of specified items is 3% of FOB value of exports of

leather garments during preceding financial year.

4. Duty free entitlement for import of trimmings, embellishments and footwearcomponents for footwear (leather as well as synthetic), gloves, travel bags and

handbags is 3 % of FOB value of exports of previous financial year. Such entitlement

shall also cover packing material, such as printed and non-printed shoeboxes, small

cartons made of wood, tin or plastic materials for packing footwear.

5. Machinery and equipment for Effluent Treatment Plants shall be exempt from basiccustoms duty.

6.

Re-export of unsuitable imported materials such as raw hides & skins and wet blueleathers is permitted.

7. CVD is exempted on lining and interlining material notified at S.No 168 of CustomsNotification No 21/2002 dated 01.03.2002.

8. CVD is exempted on raw, tanned and dressed fur skins falling under Chapter 43 ofITC (HS).

9. Re-export of unsold hides, skins and semi finished leather shall be allowed fromPublic Bonded warehouse without payment of export duty.


12/12

the Central Government is implementing three sub-schemes under Indian Leather

Development Programme (ILDP) during the 11th Five Year Plan to meet the requirement of

manpower in the leather industry. The details are as under: -

Sl

No.Name of sub-scheme

Allocation for

11th Five Year

Plan

(Rs. in crore)

Source of funding Places where centre is established

1

Footwear Design and

Development Institute

(FDDI), Fursatganj

7.17

Grants-in-Aid from Central

Government under Indian

Leather Development

Programme (ILDP)

Fursatganj in Uttar Pradesh.

2

Up gradation and

Establishment of

Institutional facilities

300.07



Leather Development

Programme (ILDP)

Three branches of FDDI are being

established at Chennai in Tamil Nadu,

Kolkata in West Bengal and Rohtak in

Haryana. In addition, the existing branch of

FDDI at Noida would be up-graded.

3

Establishment of

Training Centre in

Madhya Pradesh

24.88



Leather Development

Programme (ILDP)

Chhindwara in Madhya Pradesh.

Testing facilities for the Leather Industry exist at Central Leather Research Institute, Chennai and its Regional Centres at Jallandhar, Kolkata

and Kanpur; Footwear Design and Development Institute at Noida and Fursatganj; and Testing Centre in the Footwear Component Park at

Chennai. For addressing the environmental issues of the Leather Industry, the Central Government is implementing a sub-scheme

Environment Initiatives with an outlay of Rs. 200 crore under ILDP during the 11th Five Year Plan period.

The Central Government is implementing a sub-scheme, Integrated Development of Leather Sector (IDLS) with an outlay of Rs. 253.43

crore under ILDP during the 11th Five Year Plan period. Under the sub-scheme, assistance are provided to leather units in the form of

investment grant at a rate of 30% for Small Scale Industries (SSI) and 20% for non-SSI upto Rs. 50 lakh. Assistance above Rs 50 lakhs is

provided at a rate of 20% within ceiling of Rs. 2 crore.

Documents

Export of Leather Goods