While Bangladesh’s leather footwear exports are on a high, the broader leather industry – particularly processed leather and leather goods – is facing a sharp decline, revealing a tale of two sectors heading in opposite directions.
According to the latest data from the Export Promotion Bureau (EPB), Bangladesh’s export earnings from leather and leather products rose by 12.55 per cent to $1.05 billion during the July-May period of the current 2024-25 fiscal year. This marks an increase from $940 million in the same period last year.
The primary contributor to this growth was the strong performance of the leather footwear segment. Export earnings from leather footwear category surged by 28.96 per cent, reaching $620 million, compared to $481 million during the same period in the previous fiscal year.
However, the overall leather industry saw mixed results, as the other two sub-sectors recorded negative growth.
Processed (crust) leather exports fell by 7.82 per cent to $120 million, down from $130 million last year.
Other leather goods exports declined by 3.39 per cent, totalling $318 million compared to $329 million in the same period of the previous fiscal year.
Despite setbacks in some segments, the notable rise in leather footwear exports highlights the sector's potential as a key export driver for the country.
Why are leather shoes exporting well?
According to Mohammad Nazmul Hasan, Senior Vice President of the Leather Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), global buyers are increasingly turning to Bangladesh as an alternative to China.
“The price of leather shoes made in China has increased due to higher tariffs,” he said.
“As a result, international buyers have shifted their sourcing base to Bangladesh. That is why we’ve seen strong growth in our leather footwear exports.”
He added that Bangladesh’s rising competitiveness in value-added manufacturing is helping the sector attract more demand. “This growth reflects our increasing capacity to produce quality finished products—not just raw materials or semi-finished goods.”
A crisis in processed leather
Despite progress in footwear, processed leather and leather goods continue to suffer, raising alarms among industry leaders.
One key reason: non-compliance with environmental standards.
“International buyers are now very sensitive to eco-friendly production methods and sustainable supply chains,” said Shaheen Ahmed, President of the Bangladesh Tanners Association (BTA).
“Unfortunately, most tanneries in Bangladesh still fall short of global environmental norms.”
Ahmed pointed out that the government’s move to relocate tanneries from Hazaribagh to Savar was intended to make the industry more environmentally compliant.
However, the lack of a central waste treatment plant continues to undermine those efforts.
“We’re unable to take full advantage of export opportunities despite having ample domestic raw materials,” he said.
“Global buyers look for compliance—they don’t want to buy from non-certified factories.”
He urged the government to invest an additional Tk 200–300 crore to complete the infrastructure needed for sustainable leather processing.
“I believe the government will realize the importance of this sector and take necessary steps to make it policy-supportive,” he added.
Call for sustainable investment
Former World Bank economist Dr Zahid Hossain echoed these concerns, emphasising that sustainable production practices are no longer optional.
“There is growing global demand for eco-certified factories and green products,” he said. “If Bangladesh doesn't invest in clean technologies and environmental branding, it risks losing important markets.”
He stressed that now is the time to act, urging policymakers to support a shift toward eco-friendly tanning processes and certification programmes that align with international standards.
Environmental non-compliance hurting market access
Industry insiders say the lack of proper waste management systems and environmental clearances is leading many foreign buyers to avoid Bangladeshi leather goods altogether.
“Buyers choose countries based on quality, but also on environmental responsibility,” said Nazmul Hasan. “If a buyer chooses a country, we cannot ignore it.”
The absence of a fully functional waste treatment system at the Savar tannery zone remains a major obstacle. Despite significant public investment, the facility has not yet delivered the expected results.
Two sectors, two futures
Bangladesh’s leather industry is clearly divided. While shoe exports are rising thanks to shifting global trade dynamics, the traditional leather processing segment is being left behind due to outdated practices and environmental shortcomings.
For policymakers, the message is clear: without further investment in sustainability and compliance, the country may miss its chance to become a true global player in the leather industry.
As the interim government works to restructure key export sectors, the leather industry presents both a challenge and an opportunity – one that could determine whether Bangladesh becomes known not only for what it makes, but how it makes it.