Leather sector seeks urgent policy rescue

Industry leaders warn Bangladesh could lose a major export opportunity without swift reforms, investment support

FE REPORT | Published: May 23, 2026 23:19:40

The leather industry is facing mounting pressure from rising financial costs, weak infrastructure and policy bottlenecks, prompting fresh calls for urgent government intervention to revive one of the country's most promising export sectors.
Experts and business leaders at a discussion on Saturday warned that the industry risks falling deeper into crisis unless long-standing structural problems are addressed quickly.
They said the leather and leather goods sector has the potential to generate annual trade worth US$25 billion to US$30 billion if supported by coordinated reforms, modern infrastructure and export-friendly policies.
They observed that Bangladesh could emerge as a major global leather sourcing hub with timely policy action and improved supply chain management.
Leather Industry Development Foundation of Bangladesh (LIDFB) organised the discussion titled "Leather Industry in Existential Crisis: Finding the Way Out" at the Economic Reporters Forum auditorium in Dhaka.
Chaired by LIDFB Convener Shadat Hossain Selim and moderated by its Secretary Muhammad Shafiqur Rahman, a 13-point proposal package was presented at the meeting, aimed at transforming the sector into a globally competitive export-oriented industry.
Key recommendations included the formation of a separate leather ministry or an autonomous leather board to accelerate policy decisions and coordination, alongside the establishment of modern leather collection centres and temporary cold storage facilities to preserve raw hides and reduce wastage, especially during Eid-ul-Azha.
For the upcoming Eid-ul-Azha, speakers proposed expanding Dhaka's leather collection zone to nearby districts such as Narayanganj, Munshiganj and Narsingdi to improve collection and supply chain management.
Industry leaders also voiced concern over heavy dependence on bank financing and high financial costs, alleging that banks take up to 15 per cent from the sector, leaving businesses with narrow profit margins.
They called for easier SME loans, special export incentives, business-friendly banking policies and rehabilitation support for affected tannery units.
The seminar further proposed establishing a specialised "Leather Footwear City" to boost domestic production, employment and exports.
Speakers also highlighted the longstanding role of madrasa institutions in the leather trade during sacrificial festivals and criticised arbitrary price fixing in the local market, saying international prices are generally determined by demand and supply.
Among others, lawmakers, professors, leaders of Hefazat-e-Islam Bangladesh and the Qawmi Madrasa Education Board, as well as representatives of tannery, manufacturing and footwear associations, attended the programme.
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