As the second wave of Covid batters India, the leather market in Mumbai’s Dharavi is struggling to keep itself afloat.
With no mode of income, Eid celebrations for Faiyaz Ahmed Mir and his family remained muted this year.
“There is no income and we’re spending currently from our savings. So this year Eid wasn’t celebrated the way we usually enjoy festivals. No new clothes or anything, only stuck to what’s needed and spent on that. We’ve even cut down household income till things get better,” says Mir, who runs High Design, leather products manufacturing business in Mumbai’s Dharavi told CNBC.
With the onset of the Covid second wave, Mir’s leather business came to a standstill for the second time since March 2020. With no incoming orders, Mir had to shut his store during Covid last year and has temporarily closed the factory now again.
Like Mir, Dharavi is home to over 20,000 small and medium businesses and units with the leather industry attracting clients from across the globe.
However, the events of the past 3-4 years has made it difficult for this industry to survive. In 2016, it was hit badly by demonetization, then came GST, followed by a slowdown and then the first wave of Covid-19 in 2020. Now, a second wave and yet another stringent lockdown have dealt a massive blow to the city’s famous leather market.
Mohammed Husain’s HN Leather, which makes leather bags, wallets, jackets, and other products for customers across India has had no business for the past 2.5 months.
“We get orders from all over India and also supply products to Crawford market here. But we’re not getting any new orders for the past few months. I have to pay rent, electricity and pay my workers. But I have had no income to do any of that,” he tells CNBC.
The adverse impact on the leather markets has led to unemployment as well. Talking to CNBC, Husain says he had to let go of most of the workers with no incoming order and is now left with a group of 4 workers in case he receives any order. On the other hand, Tajuddin Shaikh, who owns a unit and store Leather Junction, says he is only able to pay workers 50 percent of their pay.
“Most have gone back. Whoever is left here is also planning to go back. They’ve asked us to call when work resumes, but looking at the situation and the uncertainty, I am not sure how many will return,” says Mir.
Founder of Dharavimarket.com., a social enterprise that helps leather craftsmen in Dharavi generate more business and jobs through online, corporate sales and export orders has also suffered the brunt of a second Covid wave.
“The first wave was far worse as no one was allowed to work even though they lived and worked in the same place. This time, even though retail stores are completely shut, in factories, people are able to work. But there is a raw material shortage. Whoever had raw materials continued working in the first few weeks of April, but orders have declined drastically,” Gupta quips.
Deliberating on the issue, Megha added that many workshops that shut during the first wave never re-opened for businesses because the workers went back home during the first wave and have not returned.
“Craftsmen that we’ve been in touch with are saying villages are badly hit and there have been a lot of deaths. So, everyone is scared since more people are falling sick,” she said.
Due to this dire situation, many businessmen like Husain are resorting to tying up with e-commerce giants like Flipkart and Amazon to sell whatever they’re able to manufacture with the scant workforce.
However, the manufacturers are yet to figure how to smoothen the operation in online buying platforms.
Meanwhile, leather manufacturers are hopeful of some financial support for the industry from the state government or for waivers on fixed costs such as rent and electricity.
Many manufacturers like Megha are looking towards kickstarting business after the lockdown in the state is lifted post-June 1.
“We hope after June 1 at least, the government allows shops to open at least once or twice a week so we can open the supply chain again,” says Megha.