AHP-TISM Based Strategic Model for Indian Leather Industry

Abstract

The leather industry in India plays an essential role in boosting the economy through employment generation and export earnings. Regarded as one of the primitive industries in India, the leather sector significantly contributes towards the exports of leather footwear, garment, saddlery, harness, and finished leather goods. The export performance is quite promising in this sector, which currently is valued at $5.74 billion, and significantly contributes towards 12.9% of global leather and 9% of footwear requirements. The promising industry has been entitled to 100% FDI by the government for future development purposes. The industry involves other sectors such as cattle breeding and slaughtering for raw material, chemical industry for tanning process and textile and rubber industry for finished products. The industry has a strong bearing on the overall economy of the country as it provides large scale employment to the rural population especially women. However, Indian leather industry has been adversely affected by lack of formal education among the tannery owners, pollution generation, waste generation, and high cost of capital including chemical, machinery, spare parts, etc. Due to lack of focus on compliance to sustainable standards, the industry is criticized for polluting the environment and creating social discomfort. The process of leather processing releases highly toxic and carcinogenic chemicals which in turn pollute the environment posing serious threat to human and animal life. Although various researches have been conducted in this context including, the academia still needs further research to investigate issues related to the leather industry.This study thus aims to explore the underlying issues prevailing in the industry and suggest future strategies for revival. The researchers have traveled to leather units in Uttar Pradesh (Kanpur) and Tamil Nadu (Chennai, Ranipet, and Ambur) for data collection and conducted in-depth interviews with managers.The research is conducted in three phases1.In-depth interviews: The leather industry managers were asked to highlight challenges in the sector and provide their views on future strategies. Transcripts prepared from the interviews were then analyzed through content analysis to identify variables and sub-variables about challenges and strategies.2.TISM interviews: In the next stage, a group of industry managers were interviewed together and asked to provide relationships (V, A, X, and O) among the variables identified.3.AHP interviews: 9 industry managers were asked to provide relative rankings (1-9) among the sub-variables identified in the final stage.The results were analyzed, and a combined AHP-TISM model was formed. The findings reflect a lack of monitoring (C2) and frequent policies (C7) as the significant challenges afflicting the leather industry. Lack of accountability of local bodies (63.6%) and NGOs (26.0%) was the major contributing factor to the lack of monitoring. The study also suggests providing financial support (S9) to be a significant factor in the strategic revival of the Indian leather industry. Among other strategies, monitoring and supervision (S1) and infrastructural development (S3) can also help in boosting the growth of the sector.