Lok Sabha Question No. 141 (UNSTARRED), answered on 2015-11-30
Subject: Export of Leather and Leather Products
Ministry: COMMERCE AND INDUSTRY
Asked by: DHARMENDRA YADAV, SAUGATA ROY, SHIVAJI ADHALRAO PATIL, Shrirang Appa Barne, ANANDRAO  ADSUL, SHIVKUMAR CHANABASAPPA UDASI

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 141 TO BE ANSWERED ON 30 TH  NOVEMBER, 2015

## EXPORT OF LEATHER AND LEATHER PRODUCTS

## 141(H). SHRI DHARMENDRA YADAV:

PROF. SAUGATA ROY:

SHRI ADHALRAO PATIL SHIVAJIRAO:

SHRI SHRIRANG APPA BARNE:

SHRI ANANDRAO ADSUL:

SHRI SHIVKUMAR UDASI:

Will the Minister of COMMERCE & INDUSTRY ( वाणिज्य एवं उद्योग मंत्री ) be pleased to state:

- a) the quantum and value of leather and leather products exported from the country during each of the last three years and the current year;
- b) whether the export of leather  and  leather  products have  declined during the  said period particularly from April to September, 2015 as compared to the corresponding period last year and if so, the details thereof, year-wise;
- c) whether the Council for Leather Exports has requested the Government to come out with  favourable  tariff  so  as  to  revive  the  leather  industry  and  if  so,  the  details thereof along with the reaction of the Government thereto;
- d) whether the Government proposes to provide interest subsidy to  leather  industry and if  so,  the  details  thereof  along  with  other  steps  taken  by  the  Government  to revive the said industry; and
- e) whether  the  leather  industry  has  the  requisite  potentials  to  grow  in  the  State  of Karnataka and if so, whether the Government proposes to set up leather cluster in Belgaum and Bangalore rural districts of the State to tap the potentials of the leather industry of the State and if so, the details thereof and if not, the reasons therefor?

## ANSWER

वाणिज् य एवं उद्योग राज् य मंत्री )श्रीमती निममला सीतारमि((स्वतंत्र प्रभार ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE AND INDUSTRY (INDEPENDENT CHARGE) (SMT. NIRMALA SITHARAMAN)

- (a)  The details of value and quantum of leather and leather products exported from India are enclosed as Annexure-A.
- (b)  Yes Sir.  During April to September 2015, the export of leather and leather products was US$ 3123.83 million against US$ 3437.18 million in the corresponding period of 2014.
- (c)  The Council for Leather Exports had requested for reduction in the rate of Central excise duty on footwear with leather upper from 12% to 6% which has already been accepted by the Government.
- (d)  Yes Sir.  The Government has approved 3% interest equalization scheme for all MSME units  in  leather  sector  and  for  7  tariff  lines  at  HS  4  digit  level  for  leather  goods  and footwear  w.e.f.  1.4.2015.    Indian  Leather  Development  Programme  (ILDP)  is  being implemented for overall development of leather sector in the country by augmenting raw material base, capacity enhancement, modernization and up-gradation of leather units, establish institutional facilities and support to artisans.
- (e)  The export of leather, leather products and footwear from Karnataka has increased from Rs.562.26 crore in 2013-14 to Rs.591 crore in 2014-15.  There is no proposal to set up leather cluster in the State of Karnataka.

## Annexure - A

In  Value  Terms,  Export  of  leather  and  leather  products  from  the  country  have increased from USD 5.01 billion (Rs.5009.52 million) in 2012-13 to USD 6.50 billion (USD 6499.97 million) in 2014-15.

| 2012-13    | 2013-14   | 2014-15   | 2015-16   |
|------------|-----------|-----------|-----------|
| APRIL- MAR | APRIL-MAR | APRIL-MAR | APRIL-SEP |
| 5,009.52   | 5,916.12  | 6,499.97  | 3123.83   |

Quantity  wise  export  of  leather,  leather  products  and  footwear  (except  leather garments) has increased during last 3 years as shown below.

| Product                                                                     | Unit   |   2012-13 |   2013-14 |   2014-15 |
|-----------------------------------------------------------------------------|--------|-----------|-----------|-----------|
| Finished Leather                                                            | Sq. ft | 759565425 | 822668171 | 834452198 |
| Footwear Components, Leather Footwear, Non-Leather Footwear, Leather Gloves | Pairs  | 270994825 | 293813873 | 332035246 |
| Leather Garments, Harness and Saddlery, Leather Goods                       | Pieces | 170110208 | 172119056 | 184430990 |

(Based  on  membership  records  of  Council  for  Leather  Exports  as  available  upto 2014-15)

## Annexure - B

Indian Leather Development Programme (ILDP) is being implemented by the Department of Industrial Policy and Promotion in the 12 th  Five Year Plan for overall  development of leather sector in the country. The major objective of ILDP is to augment raw material base, enhance capacity, modernization and up-gradation  of  leather  units,  address  environmental  concerns  ,  human resource development, support to traditional leather artisans, address infrastructure constraints and establish institutional facilities.  The ILDP comprises the following six sub-schemes:

1. Integrated  Development  of  Leather  Sector  (IDLS) -  Under  this  subscheme, assistance is provided for technology up-gradation/modernization and/or expansion and setting up of a new unit in the leather sector. The Sub-scheme provides assistance in form of investment grant to the extent of 30% of cost of new plant and machinery for micro and small enterprises and 20% of cost of new plant and machinery for other units subject to a ceiling of Rs. 2 crore for each product line.
2. Human Resource Development (HRD) -  HRD mission targets potential work  force  for  leather  sector  and  lays  stress  on  skill  development  and technical  development.  This  project  is  intended  to  train  and  prepare individuals  to  be  fit  to  work  in  medium  to  large  industrial  units.  Up gradation  of  skills  of  persons  already  employed  in  the  sector,  besides training  for  trainers/supervisors,  is  also  undertaken.  Under  Placement Linked  Skill  Development  Training,  at  least  75%  of  trained  persons  are placed in the industry as per the guidelines.
3. Support to Artisan - There are various clusters in India making traditional footwear and other leather goods. The aim of this scheme is to promote the clusters at various forums as they are an integral part of rural Indian economy and have potential for generating local employment and export. The artisan clusters all over India would be supported for enhancing their design  and  product  development,  capacity  building,  providing  marketing support, establishing common facility center and marketing
4. support/linkage. The broad objective of this component is to ensure better and higher returns to the artisans resulting into socio-economic upliftment.
4. Establishment  of  Institutional  Facilities -  The  sub-scheme  of  ILDP aims  at providing institutional facilities by way  of establishing  new campuses of FDDI to meet the growing demand of the leather industry for footwear  technologies,  designers,  supervisors  and  mechanics.  Two  new branches of FDDI in Punjab and Gujarat are being set up.
5. Leather Technology, Innovation & Environmental Issues -  This  subscheme  provides financial support to Leather Cluster to  meet the prescribed  pollution  control  discharge  norms  and  environmental  issues. This covers establishment/ expansion/ up gradation of CETPs, Technology benchmarking  for  implementing  cleaner  technologies  for  environment management,  utilization  of  solid  waste  from  tanneries  and  conducting workshops to educate and train the tanners and tannery workers.
6. Mega Leather Cluster - The major objective of developing Mega Leather Clusters  is  to  create  state  of  the  art  infrastructure  and  to  integrate  the production  chain  in  a  manner  that  caters  to  the  business  needs  of  the leather industry so as to cater to the domestic market and exports. These mega clusters  will  assist  the  entrepreneurs  to  set  up  units  with  modern infrastructure, latest technology, and adequate training  and  Human Resource Development (HRD) inputs. The development of Mega Leather Clusters would help in creating additional employment opportunity, particularly  for  the  weaker  sections  of  society.  Mega  Leather  Clusters (MLC) for the development of leather industry will have minimum common facilities. The project cost would cover various infrastructure developments like  Core  Infrastructure,  Special  Infrastructure,  Production  Infrastructure, HRD  &  Social  Infrastructure,  R&D  Infrastructure  and  Export  services related infrastructure.

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