Published
Jul 21, 2017
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Incentive package coming soon for India’s leather sector

Published
Jul 21, 2017

Last week, The Supreme Court (apex court of India) had given the multibillion dollar leather industry of India something to cheer after suspending a government ban on the trade of cattle for slaughter. Now it looks like the government is trying to appease the sector by giving them a million-dollar incentive package.


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According to sources, the government is expected to announce a Rs 2,600 crore (approx $405 million) incentive package for the leather and footwear sector to boost exports and job creation. Sources added that the package has already got the required nod from the expenditure finance committee.

Earlier this year Finance Minister Arun Jaitley had announced scheme to revive the labour intensive leather and footwear sector like the one given to the textile sector. The textile and apparel sector had got an incentive package of Rs 6000 (approx $940 million) last year.

The announcement of the package for the leather industry is of significance as it comes at a time when the leather industry and government are at loggerheads over the recently passed cattle ban law in India.
 
India's leather export industry is currently estimated at nearly Rs 40,000 crore ($6 billion) and the government is aiming to increase the sector exports to $15 billion by 2020.

The proposal, mooted by the commerce and industry ministry, has sought tax incentives for the 'Indian Footwear, Leather, and Accessories Development Programme'. The package, which includes both tax and non-tax benefits, was prepared on the lines of the steps announced for the textiles sector last year, sources, who did not wish to be identified told news agency PTI.
 
India is a very important leather market for international brands like Zara, Prada, Armani, Clarks, Gucci, Hugo Boss and that’s why it was included as a focus sector in the government’s ambitious ‘Make in India’ initiative.

The financial package is expected to support the sector in terms of employment and boost exports. Currently about 30 lakh people are directly employed in the leather sector.
 

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