Barriers and Opportunities for Promoting Trade
in Environmentally Friendly Products-
A Study of India’s Leather Industry
Please send your comment to: Sandeep Singh
(Email: firstname.lastname@example.org or Fax: +91-141.207486)
1.1 Leather production technology4
1.2 Environmentally Friendly Production
Methods and Technologies5-6
2.1 India’s Leather Industry7-8
2. Technology Status of India’s Leather Industry8-14
3. Industry’s Capability to Adopt ESTs14-16
4. Governmental Support to the Promotion of ESTs.16-17
5. Export of Environmentally Friendly Leather
and Leather Products17-18
3.1 Kanpur Leather Industry19-24
3.2 case study24-36
Global trade in leather and related goods has grown tenfold during the last 20 years. The trade in leather goods and leather products is particularly important for a number of developing countries. It is an important source of both employment and foreign exchange.
Recent years have seen a large shift of leather industries from industrialized to developing countries. This has been prompted by both cheaper labour costs and stringent environmental regulations in the former. As the environmental regulations in industrialized countries become stricter, and the cost of compliance increases, leather and many other polluting industries have moved to developing countries.
The conventional leather tanning technology is highly polluting as it produces large amounts of organic and chemical pollutants. These pollutants, which are mostly contained in the effluent discharged by tanneries, are a serious threat to the environment. The tannery effluent, if not treated properly, can cause serious damage to soil and water bodies. The high amount of salt contained in the effluent, for example, can increase soil salinity, reduce fertility and damage farming in large areas. Tanneries also produce harmful gases, dust and a large amount of solid waste.
It is often suggested that the developing countries can take advantage of the increasing environmental concerns in developed countries by undertaking the production and export of environmentally friendly goods. They can, for example, increase their leather exports by catering to consumer preference in developed countries by exporting leather produced with cleaner technologies. It is also argued that the adoption of cleaner and environmentally friendly production methods will also become necessary to meet the increasingly tough environmental standards in developed countries.
The developing countries’ ability to produce and export environmentally friendly goods depends on a number of factors. These include the cost and availability of environmentally friendly technologies and production methods. Are these technologies available to firms in developing countries? Do these firms have the resources to adopt these technologies? Are local policies conducive to the adoption of cleaner production technologies, and are the institutions responsible for monitoring and enforcing environmental standards competent? Again, the incentive to adopt environmentally friendly technologies for export markets will be greatly influence by the behavior of consumers in developed countries. Are the consumers in these countries willing to pay extra for products manufactured using environmentally friendly processes?
The present study examines these issues for India’s leather industry. The study is largely based on a) a review of published information and b) information collected from 11 companies, who manufacturer and export finished leather and leather products. Of the 11 companies, 8 are located in the Jajmau cluster in Kanpur. The other three are located in Kanpur city and neighbouring Unnao. The information collected through detailed discussions with...