§1What this business is
Finished leather is cut into parts, the edges skived for folding, zips and fasteners fixed, outer leather, lining and reinforcement glued and stitched, then trimmed, cleaned and polished. Buyers are bag shops, boutiques, wholesalers and exporters.
Capacity: 100 bags a day on one 8-hour shift (100–150 a day with 5–6 workers in the text).
§2Is it right for you?
Who it is for
An artisan or designer near a leather cluster with buyers in boutiques or exports.
Who it is not for
Someone without design sense or buyer contacts.
Advantages
- Leather goods are among India's top export earners (report)
- Small machinery bill (₹4.80 L)
- Skilled artisans in leather clusters
- Designs can move up-market
Drawbacks
- Leather is costly and uneven in quality
- Fashion risk on designs
- Synthetic bags are cheaper
- Low year-1 profit (₹2.23 L)
Skills you need
- Leather cutting and skiving
- Stitching and edge finishing
- Design and sampling
- Selling to boutiques and exporters
Why difficulty 2/5: Small set-up; success rests on craft and design.
§3Market
Who buys
- Women buying handbags
- Office-goers and travellers
- Boutiques, wholesalers and exporters
How it sells
- Bag and accessory shops
- Boutiques and exhibitions
- Export orders through buying houses
Good to know
- The report says leather accessories account for 26.44% of India's leather export share.
- Purses and wallets hold the largest share of the handbag market: 34.8% by revenue and 35.4% by volume (report).
- Main export markets named: USA, Japan, UK, Brazil, Canada, Italy.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Sewing machine | 5 | ₹2,50,000 (₹50,000 each) |
| Stainless-steel edge paddle | 4 | ₹1,00,000 (₹25,000 each) |
| Pressing tool machine | 2 | ₹80,000 (₹40,000 each) |
| Cutting tools and other equipment | 1 lot | ₹50,000 |
From: PMEGP sample project report — Leather Bags (prepared by Udyami/Samadhan)
- Tan (finished) leatherthe main material; irregular in shape, so cutting skill matters
- 2 mm lacing, linen or waxed thread, lacing and stitching needlesfor stitching
- Leather dyes and acrylic paintsfor colour and edges
- Hardware (rivets, buckles, keepers, closures) and contact adhesivefittings
From: PMEGP sample project report — Leather Bags (prepared by Udyami/Samadhan)
Suppliers in Building Business Bazaar
Footwear Design & Development Institute, Chandigarh (Banur) campus · Banur →Footwear Design & Development Institute, Rohtak campus · Rohtak →Footwear Design & Development Institute, Noida campus · Noida →Footwear Design & Development Institute, Fursatganj (Raebareli) campus · Fursatganj →Footwear Design & Development Institute, Jodhpur campus · Jodhpur →Footwear Design & Development Institute, Guna campus · Guna →Footwear Design & Development Institute, Patna campus · Bihta →Footwear Design & Development Institute, Ankleshwar campus · Ankleshwar →Footwear Design & Development Institute, Chhindwara campus · Chhindwara →Footwear Design & Development Institute, Kolkata campus · Kolkata →Footwear Design & Development Institute, Hyderabad campus · Hyderabad →Footwear Design & Development Institute, Chennai campus · Irungattukottai →
In our raw material database
§5Licences & registration
- GST registration
- Udyam registration
- Trademark for your brand (optional)
- IEC for export
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- Stand-Up IndiaCentralClosed₹10 lakh – ₹1 crore loan
PMEGP fits; MUDRA up to ₹20 L; CGTMSE for collateral-free loans; Stand-Up India for SC/ST or women owners (just above ₹10 L).
§7Money
How the investment is worked out: Samadhan report: plant & machinery ₹4.80 L, misc assets ₹0.50 L, furniture ₹0.25 L, working capital ₹4.53 L = ₹10.08 L. Premises rented. Two PMEGP links ('leather bag', 'Leather bags final') carry versions of the same report.
Working capital: Working capital ₹4.53 L (bank ₹4.08 L); 15 days of raw material and finished stock, 15 days' credit to buyers.
Year not printed on these reports — check current machinery prices.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: CLE
- CLE (Council for Leather Exports) helps with buyer meets and fairs.
- Exports need an IEC from DGFT.
§9Risks — where people fail
- Leather price and quality swings
- Designs going out of fashion
- Export order cancellations
- Rejects for finish defects
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working leather bag making unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (GST registration, Udyam registration), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Leather Bag Making?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
- PMEGP sample project report — Leather Bags (prepared by Udyami/Samadhan)
- PMEGP sample project report — Leather Bag (prepared by Udyami/Samadhan)
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.