What is the billion dollar-cage for our leather industry and how we can break free?

Globally, the leather and footwear market size exceeds $420 billion. Bangladesh, with its cost advantage, could easily carve out a larger slice of the pie. In fact, sector leaders estimate an export potential of $10 billion annually, if compliance and infrastructure gaps were bridged. 

But instead of scaling upward, exports have stagnated since 2012, when they peaked around $1.24 billion. Today, even after modest growth, the figure remains stuck in the same orbit — a phenomenon many now call the "billion-dollar cage".

Industry insiders say it could easily earn five times that amount if only policy and compliance barriers were addressed. So why does the dream of transforming leather into Bangladesh's next export powerhouse remain trapped behind a mix of bureaucratic inertia, structural weakness, and environmental neglect?

Can Bangladesh's leather sector ever break free of its billion-dollar cage? The potential is undeniable: a self-sufficient raw material base, proven manufacturing capability, and proximity to major markets. But potential alone is not power.

The failure to operationalise Savar's CETP, the absence of credible certification, and the lack of an integrated export policy have collectively eroded global confidence. While global demand for ethically sourced leather goods grows each year, Bangladesh remains excluded from the conversation.

In the coming years, environmental requirements will become even more stringent across global markets. This will be a major constraint if we are not prepared. From the kind of energy used to whether production processes are carbon-friendly, environmental sustainability will only grow in importance.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), believes this sector still holds enormous potential. The value addition is high, and with the right focus — on environmental readiness, carbon emission reduction, workers' rights, global assurance, and proper waste treatment — it could transform into a major export earner.

"So, we must make a concerted effort to pursue both avenues," he added.

Md Shaheen Ahamed, chairman of Bangladesh Tanners Association (BTA), said their biggest requirement is to make the Savar industrial estate fully compliant — particularly in terms of managing both liquid and solid waste.

"At the same time, we need to consider the financial strain the tannery owners are facing. Many of them have lost their working capital — nearly Tk10,000–12,000 crore in total — after investing in factory buildings at Savar," he added.

Ahamed further said that if the government could provide Tk3,000–4,000 crore as new working capital, businesses could resume smooth operations.

"Those who are capable of obtaining LWG certification should be prioritised for soft loans so that they can install individual effluent treatment plants, invest in compliance upgrades, and rebuild their operations. With this kind of targeted financial and policy support, the sector could expand rapidly once again," he said.

The leather industry's stagnation is thus more than an economic failure; it is a governance failure. It reveals how institutional neglect can trap even a high-potential sector in perpetual underperformance.

Until Bangladesh learns to align its policy priorities with its industrial ambitions, the promise of a "next RMG" will remain just that — a promise, fading slowly in the smell of untreated tannin and lost opportunity.