The Hindu Business Line : Step up value-added leather product exports: Kamal Nath

The Minister for Commerce and Industry, Mr Kamal Nath, with the Chairman of the Council for Leather Exports, Mr Rafeeque Ahmed, at a meeting in the Capital on Friday. — Ramesh Sharma

New Delhi , July 22

THE Indian leather industry should step up its exports, particularly value-added leather products to $7 billion in the next five years from the current $2.3 billion so that the country's leather exports would account for at least five per cent of global trade in leather, the Union Commerce & Industry Minister, Mr Kamal Nath, said today.

Taking part in an interactive meeting with the leather industry, organised by the Council for Leather Exports (CLE), he said that this is important because such a share in global trade in leather exports would generate over one million additional jobs in the labour-intensive leather industry within the country.

He added that the industry should lay due emphasis on design and technology, quality and innovation, and economies of scale. Stating that the Department of Industrial Policy & Promotion has a special Integrated Leather Development Programme for the leather industry, the Minister said that Rs 290 crore has been sanctioned in order to modernise and upgrade the leather industry.

He added that Rs 71 crore had already been provided in the last one year by the Government to bolster industry initiatives for specific infrastructure development and environmental safeguard measures in different leather clusters across the country.

Later, speaking to newspersons, the Minister said that China's move to revalue its currency would help boost India's exports.

India's exports to China are growing at a faster clip of 55.20 per cent last year at $4,586.28 million, against $2,955.10 million in 2003-04.

He also said that revaluation of the yuan was "a step towards market economy. Now that they have taken this, it has yet to be seen how it will be implemented and calibrated."

Earlier, in a presentation, the Chairman of the CLE, Mr Rafeeque Ahmed, said that there have been three manufacturing joint ventures in the leather sector in the last couple of years as major European producers were finding it difficult to sustain their manufacturing activity in the face of escalating wage cost and competition from low-cost supply of the efficient producers from developing countries.

He said that two sole manufacturing units from Italy, Suolificio and Mondial Spa, partnered with Indian companies and started production.

A major Spanish company, Zahonero, is in the process of establishing a manufacturing unit for shoe components with its own equity in Delhi, he added.

Mr Ahmed also said that the industry is demanding for Central excise exemption on footwear, footwear components, and leather machinery, and countervailing duty exemption on tanning extracts so that it could take advantage of cost reduction to increase volume and export more value-added items.

He told Business Line that the Minister has assured the industry to take up this matter with the Finance Ministry.

While the Council for Leather Exports would carry on with the pilot projects in animal welfare reform programmes in the wake of strident protests from foreign countries about alleged cruelty to animals by the leather industry, the industry is also keen that the Union Government along with the State Governments adopt this animal welfare reform programme on a priority basis to fend off orchestrated campaign against leather industry's export products abroad, he added.

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