In a significant move aimed at bolstering the leather and footwear industry, the Council for Leather Exports (CLE) has called for an extension of the Production-linked Incentive (PLI) scheme. During a pre-budget discussion with Finance Minister Nirmala Sitharaman on Tuesday, CLE Chairman Rajendra Kumar Jalan highlighted the potential benefits of extending the PLI scheme to this sector.
The primary goals are to
- Enhance job creation,
- Boost domestic manufacturing, and
- Increase exports.
“The implementation of the PLI scheme will bring about a structural transformation in the industry, positioning India as a major manufacturing hub”
Rajendra Kumar Jalan, Chairman, Council for Leather Exports (CLE)
He emphasized that the PLI scheme would not only drive significant investments in modernizing and expanding existing units but also encourage the emergence of new start-ups, thereby expanding the overall production capacity.
Jalan detailed the substantial benefits of the PLI scheme, noting that it could result in an incremental investment of approximately Rs 6,000 crore (approxi US$720 Million). This, in turn, is expected to generate employment for about 2 million workers, both directly and indirectly.
Such growth would represent a significant boost for the leather and footwear sector, which has been a cornerstone of India’s manufacturing industry.
One of the critical requests put forth by Jalan was for an exemption from import duties on wet blue, crust, and finished leather.
In the fiscal year 2022-23, India imported these materials to the tune of USD 450.73 million. However, the export value of products made from these imports was a staggering USD 5.26 billion, more than ten times the import value.
“To enhance the price competitiveness of our value-added products, the 10 percent import duty on wet blue, crust, and finished leathers should be removed,”
Rajendra Kumar Jalan
Additionally, Jalan proposed that the government lift the export duties on all value-added leathers, including crust leathers. Currently, export duties stand at 40 percent on raw and pickled hides, crust, and wet blue leather, and 30 percent on raw buffalo hides.
“Removing these duties could lead to a substantial increase in the export of value-added leathers, potentially adding at least USD 1 billion in export value over the next two to three years,”
Rajendra Kumar Jalan
In conclusion, the CLE’s appeal for extending the PLI scheme and removing import and export duties on leather products underscores the sector’s significant potential for growth and employment generation. By adopting these measures, India could further cement its position as a leading player in the global leather and footwear market, driving substantial economic benefits and creating millions of jobs in the process
