ALSO READMega package of Rs 2,600 cr for leather sector may be announced soon Govt approves Rs 2,600 cr package for leather sector, to boost jobs Leather exports may dip by 20% if GST-related issues go unheeded: CLE Govt okays sops for leather sector, waives fee for small digital payments Rising rupee hurting leather exporters as competing countries benefit
With reference to Rs 2,600-cr sops to boost leather jobs” (December 16), finally, there is light at the end of the tunnel for the starving labour-intensive leather sector. The package will help small and medium entrepreneurs to tide over the crisis caused by demonetisation and goods and services tax (GST)-inflated taxes on raw materials used in leather tanning and finishing. Leather exports from India is sluggish, so a lot more policy measures are needed for a revival. Most leather product exporting units demand finished hides and skins at competitive prices to increase exports. There are two types of tanning — vegetable/wattle extracts tanning and chrome tanning (using chrome sulphate) which is a pollutant. The government should promote non-pollutant vegetable tanning extracts, namely mimosa (wattle extracts) which is imported as there is no production facility in India. The only two units producing wattle extracts, located in Tamil Nadu, have been out of production ever since basic import duty on the raw material of wattle bark was hiked to an abnormal 30 per cent from zero.
The high import duty should be scrapped and the duty structure should be rationalised. This would help set up wattle extracts manufacturing units.Further, dried wattle bark too can be used for tanning the leather, which can revive several sick tanning units in Dindigul, Tamil Nadu. The raw material is available in abundance at rock-bottom prices in East Africa and South America. If measures are taken to utilise this material, it could result in foreign exchange savings to the tune of $22 million annually, besides increasing overall exports of leather products, and generating employment to a large number of skilled and unskilled workers in the leather hubs of Tamil Nadu, West Bengal and Uttar Pradesh. A rationalised duty structure will enable exporters to compete with countries such as China, Vietnam and Bangladesh which are enjoying competitive advantages because of zero import duties on all raw materials in this sector. The manufacturing units can also facilitate production of Myrobolan extracts and further assist its exports since India is a major producer.
A Sathyanarayana, New Delhi Letters can be mailed, faxed or e-mailed to: The Editor, Business Standard Nehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 Fax: (011) 23720201 • E-mail: firstname.lastname@example.org All letters must have a postal address and telephone number