Leather garment and footwear manufacturers have asked the government not to treat semi-finished leather as finished product for export purpose as the move would impact availability of raw material, industry sources said.
The demand has come against the backdrop of semi-finished or crust leather makers approaching the commerce ministry to permit export of the product as finished leather with a view to increasing shipments.
Investment and technology upgradation are required to make finished leather from semi-finished one. While exports of semi-finished leather attracts 60 per cent export duty, there is no duty for shipment of finished leather.
"Exporters of semi-finished goods also want to avoid the export duty. Treating semi-finished as finished for exports will severely affect domestic as well as export of shoes and leather products," the sources added.
About 10 lakh people are employed in the finished leather industry.
In 2017-18, India's outbound shipments of finished leather stood at USD 874 million. The India's share in global leather exports and imports is about 3 per cent.