Concerned over the lack of promotional blitzkrieg, the domestic leather industry has urged the Centre to create a brand promotion fund for them as the Indian products fail to make mark in the overseas market. Since the promotional campaign involves huge investment, individual companies are not in a position to undertake the massive task, and hence sought the government help.
The major markets for Indian leather and leather products are Germany, UK, US, Hong Kong, Italy, France, Spain, Netherlands, UAE, China, Belgium and Denmark.
The Council for Leather Exports (CLE), recently has taken up the matter with finance minister P Chidambaram. ?It is our request that the government may consider formulating a specific package for brand promotion so as to provide direct financial aid to individual companies promoting their own brands at least to the extent of about 2% of their export turnover for a period of five years. For this purpose, a separate fund maybe created for brand promotion,? CLE said. Currently, assistance is available for brand promotion under India Brand Equity Fund (IBEF) only in the form of a loan.
India?s exports of leather & leather products had increased to $2.8 billion in 2012-2013, a year-on-year growth of 15%. As the leather industry has set an ambitious export target of $14 billion by 2016-17, the industry has asked the government to enhance the duty free limit under Duty Free Import Scheme (DFIS) to 5% from the current 3%. ?The duty free limit has been exhausted by many exporters and hence there is need to enhance the duty free limit under this scheme to 5% so as to raise the price competitiveness of the industry,? CLE said.
The industry has also sought the interest subvention scheme to be extended to the entire leather sector. Currently available for MSME, the 3% interest subvention scheme is now being sought for the players in the industry.
Considering the workforce shortage, the industry has requested the Centre to notify social infrastructure upgradation scheme. ?The major challenge faced by the industry now is the shortage of workforce, particularly for performing the crucial shop floor level operations wherein the major chunk of about 80% of the workforce is concentrated. The major reason for this shortage is the non-availability of stay facilities for the workforce in the leather clusters, which are located in semi-urban and rural areas. It is estimated that only 25% of the workforce has been commuting within the region of 5-10 kms from the production units while the rest commutes daily an average of 50 kms. Thus, this daily long-distance commute is a major factor which deters the workforce from joining the leather industry,? CLE said.
It said taking into consideration this aspect, the Centre may announce a social infrastructure upgradation scheme for the leather sector for constructing workmen dormitories in major leather clusters with government support of 90% and industry contribution of 10%. Accordingly, a funding provision of Rs 250 crore for this project could be considered in the upcoming Union Budget 2014-2015, it added.