Government considering incentives for leather sector

The government is considering providing incentives to the labour-intensive leather sector with a view to boosting manufacturing and exports.
Recently, a team of DIPP officials visited a leather cluster to understand the issues faced by the sector.
"The industry has informed us about their issues which includes high excise duty. This is a labour-intensive sector which has the potential to generate more jobs and push overall manufacturing," an official said.
The commerce and industry ministry may provide financial support to set up small and mega leather parks in the country, the official added.
As the sector provides employment to about 30 lakh people, the government should give special focus to this segment, Chairman of Council for Leather Exports Rafeeq Ahmed said.

"We have demanded cut in excise duty to 6 per cent from 12 per cent for non-leather products like footwears and also financial support for mega leather parks," he said.

Synthetic leather accounts for 80 per cent of the total leather product manufacturing in the country.
Ahmed said a high-powered committee headed by the DIPP secretary will meet on May 23 to discuss proposals of two mega leather parks each in Haryana and Andhra Pradesh.
China is giving tough competition to Indian leather manufacturers in terms of pricing, and support is required to compete with them, he added.
Leather exports have recorded negative growth in April.

Support to the sector will help boost shipments. Leather and leather goods are among the 25 focus sectors under the Make in India initiative of the government. The government aims to increase the exports to USD 15 billion by 2020 from the current USD 7 billion.