The Hindu Business Line : `Leather exports can touch $7 b by 2010-11'

India's leather exports will touch $7 billion by 2010-11, provided the industry is able to clock a sustained rate of export growth of 20 per cent annually.

Leather exports last year were worth $2.7 billion, reflecting a growth of around eight per cent over the previous year, said Union Commerce and Industry Minister, Mr Kamal Nath, on Wednesday.

Delivering the keynote address at the India Leather Summit 2006 - Towards Global Dominance, organised by the Council for Leather Exports, he underscored the need to make use of modern production technologies to enhance production and build capacity. "Indian leather products will not only get greater market access in developed countries in view of tariff elimination and reduction mechanism through free, regional and preferential trade agreements, the cost competitiveness of the domestic manufacturers will improve further in view of gradual phasing out of import duties on inputs and machinery."

Stating that the Government had been playing a proactive role through policy support, Mr Kamal Nath said that an Integrated Leather Development Programme was being implemented with Central allocation of Rs 400 crore, focusing on modernisation of manufacturing facilities in all segments of the sector. Based on further needs, the programme could be extended during the 11th Plan period, beginning April 2007.

Mr Kamal Nath voiced concern over poor investor interest in the industry.

"So far, overseas investment in the industry is at abysmal level of less than 0.15 per cent of total foreign investment inflows into the country. This trend needs to be reversed through aggressive campaigns, investment promotion programmes and by creating awareness about investment opportunities available."

Since the industry is a high volume employment industrial sector, continued thrust would be focused on additional employment generation, he added.

Later, during an interactive session with exporters, Minister of State for Commerce Mr Jairam Ramesh was presented with grievances and problems plaguing the sector.

Assuring the industry of the Government's overall support, he said that in the current fiscal exports are poised to post a turnaround by clocking a growth rate of 11 per cent to $3 billion.

He called upon the industry to beef up new design capacity at Agra and Kanpur.

The recent anti-dumping duty by the European Union of 16 per cent on China and 10 per cent on Vietnam has opened a new window of opportunity. Indian leather exporters must hence make a determined foray into the lucrative European market, he said.

He also urged the industry to seek investment from Taiwan, South Korea and Europe to build supply capacity domestically to cater to the overseas market.

According to him, SEZs for leather by SIPCOT at Sriperumbudur (Tamil Nadu) and another at TADA (Andhra Pradesh) would become functional soon.

The daylong summit addressed the critical issues facing the domestic leather industry, including implications of anti-dumping duties on China and Vietnam, capacity building, improving design capabilities, enhancing manufacturing competitiveness and branding of Indian leather.

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