The Hindu Business Line : Leather trade seeks long-term measures

Addressing the inauguration of the India International Leather Fair here on Monday, Mr Rafeeque Ahmed, Chairman, Council for Leather Exports, asked for removal of Central Excise and countervailing duty (CVD) on footwear components and other critical inputs, CVD removal on machinery and spare parts, and for concessional import duty on spare parts.

He hoped these measures would be announced in the union budget.

Mr Ahmed urged the Government to upgrade the existing production clusters to an appropriate special status with a suitable package of export benefits.

These clusters should be identified and upgraded on a war footing.

Ideally, a dedicated agency should be created to plan and execute such development. The industry would take up the maintenance and running of common facilities in such clusters. Small allocations or investments would not be of any help, he said.

The leather industry has been identified as a thrust area because of its potential for employment generation. The priorities are to double market share globally and generate a million jobs by 2010.

This can happen if the annual production is tripled to $12 billion or Rs 60,000 crore and exports doubled to $4 billion or Rs 20,000 crore. An annual average growth rate of 11.5 per cent will have to be maintained in the next six years.

The industry is optimistic of achieving this figure after recording an export growth rate of 12 per cent last year and 15 per cent in the current year and the positive trend can be continued for the next five years with the Government's support. Mr Ahmed urged the industry to invest, build capacities and improve productivity to achieve these goals.

The Union Minister of State Commerce and Industry, Mr E.V.K.S. Elangovan, urged the industry to take advantage of the Government's efforts to improve investments in this sector.

The leather industry had inherent advantages of a rich raw material base and adequate human resources.

While modernisation of the sector had gained momentum, it was up to the industry to take advantage of the potential.

The Union Minister for Shipping and Road Transport, Mr T.R. Baalu, inaugurated the four-day fair at the Chennai Trade Centre.

Mr S.N. Menon, Commerce Secretary, said the leather industry had only a 2 per cent share of world trade. There is a need to cover a lot of ground in the next few years. The 10th Plan scheme for the leather industry would be approved shortly. This would assist in the modernisation and expansion of the leather sector.

There is also a need to expand capacities in non-leather footwear and leather goods where there was a large potential but an insignificant share now.

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