The government is expected to announce an incentive package for labour intensive leather sector in the forthcoming Budget with a view to give a boost to the segment and generate jobs.
The commerce and industry ministry has asked its finance counterpart to give financial assistance for the Indian Leather Development Programme (ILDP) and for setting up of mega leather clusters in the country, an official said.
As the ILDP, which is a central sector scheme, has provided huge support to the sector, the finance ministry may consider extending it for three more fiscals. It will end by this fiscal.
The commerce ministry has asked for about Rs 7,000 crore for this programme for three years.
“The incentives are asked broadly on the lines of the package announced for the textiles sector. Presentations have already been given to Prime Minister’s Office and the Finance Ministry,” the official said.
The industry has also demanded cut in excise duty to 6 per cent from 12 per cent for non-leather products like footwears till the Goods and Service Tax comes into force.
The major players of the sector includes Bata India, Liberty Shoes, Mirza International and Relaxo Footwear.
The commerce ministry is hopeful for the package in the India Budget 2017-2018 as the sector has huge potential to attract investment and generate jobs, the official added.
Synthetic leather accounts for about 90 per cent of the total leather manufacturing in the country.
The sector is important as it is a thrust segment under the ‘Make in India’ initiative.
Chairman of Council for Leather Exports Rafeeq Ahmed has time and again asked the government to extend financial support.
As per industry experts, Rs one crore investment in the sector results in creation of jobs for about 250 people. Currently about 30 lakh people are directly employed in the sector.
China is giving tough competition to Indian leather manufacturers in terms of pricing.
Support to the sector will also help boost shipments. Leather and leather goods are among the 25 focus sectors under the Make in India initiative.
The government aims to increase the exports to USD 15 billion by 2020 from the current USD 7 billion.