Rs 4,000 crore incentive package for leather sector likely in July

The government is expected to announce a Rs 4,000-crore incentive package for the leather and footwear segment in July to boost manufacturing, exports and job creation in the country.

The commerce and industry ministry, which has mooted the proposal, has asked for the Rs 4,000-crore package, which includes both tax and non-tax benefits on the lines of the steps announced for the textiles sector last year.

A sum of Rs 500 crore has already been sanctioned by the finance ministry for the sector.

Seeking incentives, the ministry has circulated a note to collect views of other ministries.

"The package would be part of the revamped Indian Leather Development Programme (ILDP). The expenditure finance committee would discuss the note and then the ministry would seek Union Cabinet's nod on the proposal. By July, we will be able to announce it," an official said.

The ILDP ended last fiscal and the ministry has asked for extending it for three more fiscals, the official said.

The major players of the sector includes Bata IndiaBSE 2.59 %, Liberty ShoesBSE 7.30 %, Mirza InternationalBSE 0.58 % and RelaxoBSE -1.81 % Footwear.

The sector assumes significance as it is a thrust segment under the 'Make in India' initiative.

The Council for Leather has time and again asked the government to extend financial support.

As per industry experts, Rs 1 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.

In global market, China is giving a tough competition to Indian leather manufacturers in terms of pricing.
A finacial package would support the sector to boost exports. Leather and leather goods are among the 25 focus sectors under the Make in India initiative.

The government aims to increase the sector exports to USD 15 billion by 2020 from the current USD 7 billion.

The Indian industry is mainly dominated with products made up of synthetic leather. It accounts for about 90 per cent of the total leather manufacturing in the country.

Last year, the Union Cabinet introduced labour law changes while approving a Rs 6,000-crore package for the textile and apparel sector.

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