Lockdown Effect: Something Is Rotten in Jalandhar’s Rs 1,500-Crore Leather Industry

As the nation ‘unlocks,’ Punjab’s leather traders mourn losses worth crores, lack of labour and zero demand.

Jalandhar: At 50 years old, when he thought his future was secure, raw hide supplier Bihari Lal Kler had no option but to start an auto repair shop just to survive the nationwide lockdown imposed to slow the spread of the COVID-19 virus in India.

The lockdown has economically devastated several small-scale industries such as Jalandhar’s leather trade.

Standing next to his deserted raw hide shop and godown in Boota Mandi, a famous leather trade hub on the Jalandhar-Nakodar highway in Punjab, Bihari Lal said: “This is how I survive. The auto repair shop gets some customers, but otherwise I am ruined. Earlier, I kept the godown doors open for buyers; now it is just a way to air out the stink of the raw hide that has been lying here for last three months.”

Should Bihari Lal get a customer for the raw hide, he would sell it for Rs 40 per sheet because by now the product has gone rotten. Before the lockdown, the raw hide sold for Rs 500 per piece. Never since his family started the shop after the Partition in 1947, has there been such a drop in business, he says.

“The three-month lockdown actually ‘locked’ our business,” says Bihari Lal.

Pollution and lockdown

Jalandhar’s Rs 1,500-crore leather industry is actually facing a double whammy. Business began to fade when the Punjab and Haryana high court on October 29, 2019, imposed a strict ban under the Environment (Protection) Rules and the Water (Prevention and Control of Pollution) Act on the functioning of leather tanneries at Leather Complex, Jalandhar. Then the COVID-19 lockdown imposed at the end of March 2020 made a bad situation worse.

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The 2019 court order responded to the rampant pollution of the Kala Sanghian water stream in the region and left 200 leather tanneries shut. The next hearing of the case is scheduled for July 16 and the traders hope for some relief.

Varun Kler (30), owner of Varun Skin Company in Jalandhar, says that till 2015, he would sell a 40-foot sheet of raw hide for Rs 4,000, but since then business has been poor. He displays the rotten sheets of raw hide in his godown in Boota Mandi and says: “Today, I will be glad if someone buys it for Rs 40! Before lockdown, seven-foot pieces sold for Rs 200 to Rs 250 each. Now they would sell for Rs 10. I am staring at a loss of Rs 10 lakh and planning to quit this business.”

Raw hides dumped in a godown in Boota Mandi, Jalandhar.

Each leather unit in Boota Mandi lost about Rs 4-5 crore within the three months of lockdown, Varun estimates. Nearly 2,000 labourers employed in the industry went home. “To add to our misery, the Centre government did not waive the 5 percent GST on raw hide and 18 percent GST on finished leather. We protested, pleaded before the Centre and sent representations to Prime Minister Narendra Modi and the then finance minister and commerce & industries minister, but our demands were not met,” he says. “The Centre should at least waive two months worth of GST and bail out the leather industry from this deep crisis, or else we are doomed.”

No business, no bailout

Around 500 people from the local Scheduled Caste Ravidassia community, their families and workers from Boota Mandi have been involved directly or indirectly in the leather trade, including both wet and dry leather units.

Unlike Varun Kler and Bihari Lal Kler, several traders in Boota Mandi do not even open their shops. Shadi Lal, for instance, hasn’t opened shop for a long time, say his neighbours. “Given the current crisis, he stopped opening his shop,” they shrug. “All shops on either side of Boota Mandi are fighting a survival war in the post lockdown phase.”

Shadi Lal standing outside his shop in Boota Mandi, where raw hides were kept for the last three months.

Amarjit Mal, owner of Hindustan Leather, said people have stopped thinking about the leather trade as a career option. “My ancestors started the leather business under the banner of Milkhi Ram-Ramji Dass in 1959,” he says. “Then, the leather trade was a flourishing business, but not anymore. The third and fourth generations of the families in this trade either went abroad or are seriously thinking of other options now.”

Punjab Leather Federation (PLF) president, Parveen Kumar, who owns Raghu Exports, a leather export house supplying markets in the US, Europe, Australia and New Zealand, said, “For over eight months, our machinery and leather tanneries have been lying unused. All our hopes are now on the next court hearing scheduled for July 16. According to the court’s direction, we are upgrading the Common Effluent Treatment Plant at Leather Complex. The Centre has released a grant of Rs 19 crore while Rs 4 crore each was to be contributed by the industry and Punjab government. We have asked Punjab chief minister Captain Amarinder Singh and state industry minister Sham Sunder Arora to release a 30% grant instead of a 15% and save us.”

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Before 2015, since its inception in 1947, Punjab’s leather industry had no taxes to pay. That helped it flourish. Now there are environmental regulations to be met, a national lockdown has just ended and GST has to be paid. “The Punjab government should take us seriously,” says Kumar. “The leather industry has had no work and we will have to survive with the few labourers available.”

A view of closed raw hide shops in Boota Mandi, Jalandhar.

Mission impossible?

It isn’t only in Punjab that the leather trade has lost ground. A group of raw hide traders who prefer to stay anonymous point out that the leather trade all over the country has been seeing losses in the last six years because of the Centre’s policies.

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“First it was demonetisation, then GST and finally lockdown. Even Captain Amarinder Singh failed to address our woes,” they say. “Ironically, Jalandhar is a reserved parliamentary seat with nearly 40% Dalits, but neither our MP Santokh Singh Chaudhary, nor the local Congress MLAs including Sushil Kumar Rinku and Surinder Mahey fought for us. Som Parkash, the BJP MP from Hoshiarpur, another reserved parliamentary seat, is a minister of state for commerce and industry at the Centre, but he too never supported our demands. How do we survive?”

A closed shop-cum-godown of raw hide.

Prime Minister Narendra Modi’s emphasis on ‘Atamnirbhar Bharat Abhiyan (mission self-reliance for India)’ will not be possible to achieve, the traders add. “Only Muslims and Dalits have been running the leather trade since ages,” they whisper. “The Modi government’s harsh policies did not just affect trade but also hit both communities hard economically. We have seen many Muslim traders in Kanpur lose their businesses.”

All images by Kusum Arora.