Leather industry can be a driving force of national economy

The leather industry in Bangladesh is the second-largest export sector and has significant potential as a result of the large supply of unprocessed hides from livestock and Eid-ul-Adha sacrificial animals. Leather and tea have gradually gained significance in both domestic consumption and exports since the 1940s, when the commercial leather industry in Bangladesh was established.

Corruption, policy indecision, and a lack of environmental compliance have all contributed to the sector’s decline for more than a decade, despite its enormous potential. Bangladeshi leather products have been unable to meet the anticipated demand in the global market since 2017 as a result of these issues.

Nevertheless, there has been recent positive development. Leather and leather product exports exceeded $1 billion in the 2021–22 fiscal year, with an approximate total of $1.115 billion in the first eleven months. This figure represents a substantial increase from the previous year. Footwear exports experienced a growth rate exceeding 31%, resulting in the greatest share. The economic recovery and revival of tourism in Europe and America following the COVID-19 pandemic partially influenced this increase.

Nevertheless, obstacles persist. Future inflation and global instability, particularly the Russia-Ukraine conflict, may diminish the demand for leather products. The sector is still being impacted by environmental issues in tanneries and inadequate industry management.

Several measures are suggested to revitalise the leather industry:

1. Similar to the garment industry, government incentives, tax benefits, and financial support

2. Implementation of contemporary, environmentally favourable technology

3. Leather Working Group (LWG) certification is mandatory for tanneries that are export-orientated.

4. Guaranteeing equitable compensation and improved working conditions for employees

5. Entrepreneurs’ responsible conduct and increased transparency in bank loans

Approximately 45% of unprocessed hides in the sector come from sacrificial animals, ensuring a consistent supply base. The leather industry has the potential to re-establish itself as a significant contributor to Bangladesh’s economic development through the implementation of appropriate policies, the diversification of leather products, and the promotion of transparency.