Promotion of Leather Sector

₹ 1032.23 Crore have been spent under Indian Leather Development Programme (ILDP) during XIIth 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. The breakup of expenditure incurred under ILDP during XIIth five year plan till date is as follows:

(i)    ₹ 593.98 crore for Human Resource Development for placement linked skill development training and skill upgradation training

(ii)   ₹ 159.77 crore for Integrated Development of Leather Sector for upgrading/modernizing and / or expansion and setting up a new unit

(iii)  ₹ 15.37 crore for providing support for upgradation of two Common Effluent Treatment Plants (CETPs) and one project of Solid waste management

(iv) ₹ 63.08 crore for providing support to artisans for design and product development and market linkages

(v)  ₹ 200.00 crore for establishment of two new branches of Footwear Design and Development Institute (FDDI) at Ankleshwar (Gujarat) and Banur (Punjab)

(vi) ₹ 0.03 crore for the purpose of engagement of Project Management Consultant (PMC) under Mega Leather Cluster (MLC) sub-scheme under which one MLC at Nellore Andhra Pradesh has been approved.

In addition to assistance under ILDP as mentioned in part (a) and (b) of the answer, the following steps have also been taken up by government to promote Leather Sector in the country.

(i)  ₹ 495 Crore has been sanctioned by Department of Commerce for construction of new branches at Guna, Patna, Hyderabad, up-gradation of Chhindwara Branch and Computer Networking Centre of FDDI.

(ii) ₹ 765 Lakh has been sanctioned by Department of Commerce under Market Access Initiative (MAI) scheme and ₹ 297.93 Lakh under Marketing Development Assistance (MDA) scheme for marketing programmes and activities during 2016-17.

(iii)  ₹ 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 ₹ 500/-, 6% excise on footwear of MRP over ₹ 500 and upto ₹ 1000 and for leather footwear of MRP over ₹ 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.

This information was given by the Commerce and Industry Minister  Smt. Nirmala Sitharaman in a written reply in Rajya Sabha.