Centre mulls duty-free export of raw hide as UP shuts tanneries for Kumbh

Amiti Sen New Delhi | Updated on December 18, 2018

Duty of 60 per cent on raw hides makes exports impossible for the industry as it is not able to price the products competitively   -  Bloomberg

3-month closure seen hitting meat exporters hard

With the UP government turning a deaf ear to the Centre’s plea to not shut down tanneries in the State for three full months for the Kumbh Mela, the Commerce Ministry is examining ways to ease the situation for the affected industries.

Top officials in the Ministry met meat and leather exporters on Tuesday to look at the option of allowing raw hides to be exported without export duties, at least during the ban period, to keep the meat industry running.

Export duty waiver

“The Centre will take a call on whether it is feasible to allow export of raw hides by removing the existing export duty, at least in the December-February period, when the tanneries are closed in UP, so that the meat industry will not face the impossible task of stocking raw hides or, worse still, disposing them of as rubbish,” a government official told BusinessLine.

At present, export duty of 60 per cent on raw hides makes exports impossible for the meat industry as it is not able to price their products competitively.

Exporters of buffalo and sheep meat have been urging the government for long to do away with the export duty as there is a big market for hides globally. They say that it is imperative that orders are passed immediately, at least for the next three months.

‘Swift action needed’

“Hides need to be processed within a week of de-hiding as after that they start putrefying. We sincerely request for urgent consideration and withdrawal of 60 per cent export duty on raw hides for the survival of the meat export industry,” said a representation made by the All India Meat and Livestock Exporters Association (AIMLEA). Representatives from both AIMLEA and the Council for Leather Exports participated in Tuesday’s meeting.

Following the Yogi Adityanath government’s orders, most tanneries in Kanpur and Unnao have shut down from December 15, hitting both the leather and the meat industries in the State. Some units, which are connected to the Loni drain that doesn’t open up in the Ganga, are being allowed to function but at less than half their capacity and under numerous restrictions, said Fauzan Alavi from AIMLEA.

“It is very clear that the tanneries will not be able to process the raw hides that are the by-products of the meat industry. The government must facilitate their export,” Alavi said. The Commerce Ministry, however, has not made up its mind on the matter yet and would take a decision in some days, the official said. The high export duty had been put in place to ensure that the leather industry, which is labour-intensive, gets its raw material at a cheap price and the Commerce Ministry needs to take a decision weighing all interests, he added.

Industry turnover

According to industry estimates, the turnover of the leather industry in UP is about ₹4,000 crore a month while meat exports is worth around ₹600 crore.

The Commerce Ministry had suggested to the UP government that instead of a three-month shutdown of tanneries, it should follow the past practice of closing the tanneries only three-four days at a time ahead of the days assigned for the holy bath and allow them to function on the other days.

Published on December 18, 2018

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