Lok Sabha Question No. 1958 (UNSTARRED), answered on 2016-11-28
Subject: Incentive for Leather Industry
Ministry: COMMERCE AND INDUSTRY
Asked by: SRINIVAS KESINENI

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 1958. TO BE ANSWERED ON MONDAY, THE 28 TH   NOVEMBER,  2016.

## INCENTIVE FOR LEATHER INDUSTRY

## 1958.  SHRI KESINENI NANI:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज् यवव द्यग ं ्री

- (a) the total value of the leather industry in India and its share of exports in the Industry at present;
- whether  the  Government  proposes  to  provide  any  special  incentives  to  the
- (b) leather industry in the country; and
- (c) if so, the details thereof and if not, the reasons therefor?

## ANSWER

## वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a): As reported by Council for Leather Exports, the turnover of the Indian leather and footwear industry is estimated to be USD 12.35 billion, out of  which  exports  is  to  the  tune  of  USD  5.85  billion  (2015-16)  and domestic market USD 6.5 billion (2015-16).  The share of exports in the total turnover of the leather industry is about 47%.
- (b) & (c): Rs. 1032.23 Crore have been spent under Indian Leather Development Programme (ILDP) during XII th Five  Year  Plan  till  date.  ILDP  aims  at augmenting raw material base through modernization and technology up-gradation  of  leather  units,  addressing  environmental  concerns, human  resource  development,  supporting  traditional  leather  artisans, addressing infrastructure constraints and establishing institutional facilities. In addition to assistance under ILDP as mentioned above, the following  steps  have  also  been  taken  up  by  government  to  promote Leather Industry in the country:
- (i)    Rs. 495 Crore has been sanctioned by Department of Commerce for construction of new branches at Guna, Patna, Hyderabad, upgradation of Chhindwara Branch and Computer Networking Centre of FDDI.
- (ii)   Rs.  765  Lakh  has  been  sanctioned by Department of Commerce under Market Access Initiative (MAI) scheme and Rs. 297.93 Lakh under  Marketing  Development  Assistance  (MDA)  scheme  for marketing programmes and activities during 2016-17.
- (iii) Rs.  57.11  Crores  has  been  sanctioned  by  Department  of Commerce under Assistance to State for Infrastructure Development of Exports (ASIDE) scheme for creation of common infrastructure facilities.
- (iv)  Various other measures implemented for leather sector include no import duty on hides & skins, semi-processed as well as finished leather,  raw  and  tanned  furskins;  duty  free  import  of  Machinery under Export Promotion Capital Goods (EPCG) scheme; duty free import of notified inputs to the extent of 3% of Free on Board (FOB) value of export in previous year under Duty Free Import Scheme(DFIS); No excise duty on footwear of MRP upto Rs. 500/-, 6% excise on footwear of MRP over Rs. 500 and upto Rs. 1000 and  for  leather  footwear  of  MRP  over  Rs.  1000  along  with  30% abatement
- (v)    Permission  for  100%  Foreign  Direct  Investment  (FDI)  under automatic route in leather sector
- (vi)  MSME units in leather sector are eligible for reduction in interest rates  on  rupee  export  credit  to  the  extent  of  3%  under  Interest Equalization Scheme
- (vii) Leather products and footwear components are also entitled to 3% scrip under Merchandise Exports from India Scheme (MEIS).
- (viii) The export of finished leather and leather products get All Industry Rates of duty drawback.

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