Fall in production in western Europe and stagnation, coupled with labour and power problems in China, provide a unique opportunity for the Indian leather industry to emerge as a strong and dependable supplier to the world market. Thus, the industry has set an export target of $7 billion by 2012. Recognising the export and employment generation potential of the industry and the need to modernise and upgrade production and processing facilities, the Union government had trebled the 11th Plan allocation for the leather sector to Rs 1,300 crore against Rs 40 crore in the 10th Plan.
Of the Rs 1,300 crore, Rs 300 crore is earmarked for setting up of leather complexes and parks with a minimum assistance of Rs 40 crore each; Rs 353 crore for upgradation and establishment of institutional facilities, design and training centres, Rs 240 crore for upgradation of and installation of infrastructure for environmental protection, Rs 25 crore for development of leather and leather goods under mission mode, and Rs 917 crore for foreign and domestic investment promotion, research evaluation and consultancy services, K Elangovan, executive director of Council for Leather Exports, the apex body of exporters of leather and leather products, said in a presentation at the Central Leather Research Institute.
Some of the 10th Plan infrastructure strengthening programmes like the leather complex, footwear design and development sub-centres, footwear complex, support for rural artisans, and human resource development initiatives also would be continued.
He said the major constraints that stand in the way of the leather industry to reach the $7 billion export target by 2012 were limited turnover, very low production capacities, large number of unskilled labour on the shop floor, and inadequate design development facilities. The higher Central Plan allocation is expected to catalyse increased investment by existing entrepreneurs, help joint ventures and foreign direct investments.