The government is expected to announce soon a Rs 2,600 crore incentive package for the leather and footwear sector to boost exports and job creation, sources said.
The government is expected to announce soon a Rs 2,600 crore incentive package for the leather and footwear sector to boost exports and job creation, sources said.The package has already been approved by the expenditure finance committee and a draft cabinet note has been circulated to different ministries for their views. The proposal, mooted by the commerce and industry ministry, has sought tax incentives for the ‘Indian Footwear, Leather, and Accessories Development Programme’. Besides, support has been sought to enhance tax incentives for employment generation. The package, which includes both tax and non-tax benefits, was prepared on the lines of the steps announced for the textiles sector last year, said sources, who did not wished to be identified.
The sector assumes significance as it is a thrust segment under the ‘Make in India’ initiative. 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. The major players of the sector includes Bata India, Liberty Shoes, Mirza International and Relaxo Footwear. In global market, China is giving a tough competition to Indian leather manufacturers in terms of pricing. The government aims to increase the sector exports to USD 15 billion by 2020 from the current USD 7 billion.
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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.