The Hindu Business Line : Ministry moots creation of leather parks

Export boost
Proposals for setting up parks in Tamil Nadu, Andhra Pradesh and West Bengal sent to Finance Ministry.
Public-pvt partnership for developing infrastructure in these parks mooted.
Move to shift focus from value to volume.

MR JAIRAM RAMESH, Union Minister of State for Commerce

New Delhi June 8 On the heels of the Scheme for Integrated Textile Parks, the Commerce Ministry has also proposed a scheme to develop Small Integrated Leather Parks (SLIP) to bolster capacity augmentation of leather sector to log higher production and realise the industry's vision of $7-billion leather exports by 2011.

Disclosing this at a news conference here today, the Minister of State for Commerce, Mr Jairam Ramesh, said that he has already sent the proposal to the Finance Minister of establishing five such leather parks in Tamil Nadu, West Bengal and Andhra Pradesh, each involving a budgetary support of Rs 100 crore spread over the next five years.

He said the Finance Ministry was examining the issue and once it assents to this proposal, it would be incorporated into the11th Plan leather sector programme.

PPP model

He said the idea behind the park is that capacity augmentation for the leather industry could be facilitated through Government support in the development of infrastructure on a public-private partnership (PPP) model by extending equity contribution subsidy similar to the one implemented in the textile industry.

The Minister said that leather industry being employment-intensive involving women at the primary production level, such parks, once commissioned, would develop an additional direct employment of five lakh jobs in the next five years.

Mr Ramesh said that leather exports during 2006-07 amounted to $3.1 billion. Of this, footwear exports have been only one-third of the value-added segment, which, as per the vision document, should account for 60 per cent by 2011.

From value to volume

For this two or three significant policy shifts were being contemplated, the Minister said adding that the focus would be from value to volume as the trends hitherto were value-driven. He said that efforts would be to capture a larger share of the lucrative US market where exports of women and children footwear would be encouraged as against India's dominance in men's footwear exports only.

He said the country was also emerging exporter of non-leather footwear and the SEZ in Nellore in Andhra Pradesh by Apache would be exporting one million numbers of footwear per month. He said non-leather footwear would contribute 5-6 per cent of the total leather exports. A consortium of seven companies has already pumped Rs 60 crore in a project, outside Chennai for supply of footwear components.

Mr Ramesh said that besides Tamil Nadu, West Bengal, Uttar Pradesh and Andhra Pradesh, Bihar and Jammu and Kashmir would be the new two States for development of leather industry as they command quality raw material and other associated facilities.

He said that it is proposed to hold the India International Leather Fair early next year in Chennai where there would be global buyer-seller meet and global leather product companies from Indonesia, Malaysia and Thailand would be invited to showcase their products.