A busy street in Asia’s largest slum Dharavi leads to a quiet lane where Anita Leathers operates its colouring unit. As children play near shops that sell everything from mobile phones and garments to raw meat and sweets, the mood at the leather unit is sombre.
The leather business is one of the biggest contributors to the Mumbai slum’s informal economy, estimated to have an annual turnover of more than $500 million. About 15,000 small-scale industries, spread over an area of 500 acres, deal in businesses such as pottery, plastic recycling and garment manufacturing.
But the leather trade has been hit hard by increasing competition, an influx of cheap Chinese goods, rising raw material costs and labour shortages in recent years, leading to a decline in demand and dimming prospects of the once-flourishing business.
At Anita Leathers, which has been colouring and supplying leather sheets to merchants in Mumbai for more than three decades, annual sales fell from 5 million rupees ($83,000) in 2007 to 500,000 rupees ($8,300) last year. This has forced its owner Babu Rao to put some workers on paid leave.
“In every season our sales are falling, there is no business,” said Rao as he chewed tobacco in his Dharavi office where samples of coloured leather were displayed on the wall. “Even retailers are suffering. If customers come, they will buy bags; if bags are not sold, who will buy leather from us?”
Dharavi has earned its distinction among slums because of the entrepreneurial skills of its estimated 1 million residents. While no official statistics are available for the slum, census data shows India’s slum population grew by a quarter to 65 million between 2001 and 2011. Critics have disputed these numbers.
Leather production was one of the first industries to be established in Dharavi when Muslim tanners migrated from Tamil Nadu to Mumbai in the 19th century. But they had to move to the outskirts because the manufacturing process was considered unsuitable for the growing business centre in south Mumbai, according to a 2010 book RE-Interpreting, Imagining, Developing Dharavi.
Leather manufacturing, polishing, colouring and retail became dominant after tanneries were banned in 1996 because of pollution concerns. Still, most of these businesses are struggling.
Also affecting trade is India’s slowing economic growth, rising interest rates and high inflation, which have weakened consumer sentiment in Asia’s third-largest economy.
via Dharavi’s once-booming leather industry losing its edge | India Insight.
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