Export of leather and its products dipped by about 8 per cent in August to USD 451 million due to demand slowdown in the major market of European Union (EU).
“The EU market accounts for about 65 per cent of India’s leather exports and the situation there for Indian product is not good,” Council of Leather Exports Chairman Rafeeq Ahmed said.
The exports in August last year stood at USD 490 million.
Ahmed said that going by this trend, the exports will reach little over USD 6 billion by the end of this financial year.
“Our main market is EU and it is not in good shape. Demand is not picking up. But the order books for the next three months are good from across the globe. We hope to enter positive zone,” he added.
Although the government is taking steps to promote overall exports, “we are demanding to extend the benefits under the Merchandise Exports from India Scheme (MEIS) for some mixed (leather plus synthetic) products,” he added.
The government recently extended fiscal incentives to more items such as marine products at higher rates under the scheme with a view to boost exports, which remain in the negative zone.
The total support extended by the government under the MEIS has been enhanced to Rs 23,500 crore per annum from the present Rs 22,000 crore.
Exporters body FIEO said that incentives extended by the government would help in enhancing the competitiveness of domestic players and boost outbound shipments.
Exports were in the negative zone between December 2014 and May 2016 due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year and then again fell in July.
Contracting for the second month in a row, India’s exports in August dipped 0.3 per cent to USD 21.51 billion owing to decline in shipments of products like petroleum and leather.