The Hindu Business Line : Leather sector hails concessions

THE $2-billion Indian leather export industry is upbeat about the relaxations offered in the import norms on a slew of input items in the Foreign Trade Policy. According to industry players, the steps would lead to enhanced competitiveness of the sector.

The policy, unveiled today, has hiked the duty free entitlements for import trimmings, embellishments and footwear components for footwear (leather as well as synthetic), gloves, travel bags and handbags to 3 per cent of FOB (free on board) value of exports of the previous fiscal, as against 1 per cent previously.

The entitlement also covers packing material, such as printed and non-printed shoeboxes, small cartons made of wood, tin or plastic materials used for packaging footwear.

"The move to hike the duty free entitlements on inputs was in response to a long-standing demand of the industry. This would definitely lead to higher competitiveness in terms of product range and prices," the Chairman, Council for Leather Exports, Mr S.S. Kumar said.

The Policy has also increased duty free import levels of certain specified items for the leather sector to 5 per cent of FOB value of exports carried out during the previous fiscal.

According to industry players, while they were seeking a clarification on the list of `specified items' coming under the scheme, they said the entitlement for duty free import of up to 5 per cent of FOB value of the previous year's exports could include the leather garments sector. The leather garment units were being allowed duty free imports of up to 3 per cent of the FOB value of the previous year's exports.

"The Market Development Assistance (MDA) offered in the Policy is an important step in ensuring that our export products move up the value chain. Also, the Policy has promised monetary assistance to State Governments for development of physical infrastructure and this should go a long way in tackling the bottlenecks faced by the exporting community," the Director-Finance, Mr Kuruvilla Kuriakose, Mirza Tanners Ltd, said.

According to the policy, machinery and equipment for effluent treatment plants for leather industry has been exempt from customs duty. Re-export of unsuitable imported materials such as raw hides and skin and wet blue leather has also been allowed. "The measures would gave a fillip to efforts of the sector to adhere to pollution norms during production as well as sanitary norms imposed by the buyers," an industry player said.

The policy has also exempted the levy of the countervailing duty (CVD) on lining and interlining material and on raw, tanned and dressed fur skins.