Drawing new scheme for machinery manufacturing for leather industry: Goyal

Commerce and Industry Minister Piyush Goyal on Tuesday said the government is considering a new scheme to support domestic manufacturing of machinery and accessories used in the leather industry.

He also expressed hope that the country's exports during the current fiscal would register a high growth rate in both goods and services compared to 2021-22.

In 2021-22, exports of goods and services touched an all-time high of USD 676 billion.

"We are trying to draw up a new scheme to support manufacturing of machinery domestically, to support manufacturing of trimming or embellishments and other accessories that may be required in your industry," Goyal said here at an event of Council for Leather Exports (CLE).

On the council's demand for the reinstatement of basic customs duty exemption on the wet blue crust and finished leather, Goyal assured them to take up the matter with the concerned ministry.

According to CLE, such leathers are mainly imported by domestic exporters for making value-added products, such as handbags and garments, and duty-free import of finished leather helps manufacturers to become more competitive.

Goyal suggested the industry to utilise the benefits of the Manufacture and Other Operations in Customs Warehouse (MOOWR) scheme of the finance ministry that allows the import of any goods duty-free.

Under this programme, a unit can import goods (both inputs and capital goods) under customs duty deferment with no interest liability. There is no investment threshold or export obligation. The duties are fully remitted if the goods resulting from such operations are exported.

"I do hope that this year, we can look at a significant ramp up (in exports) both in goods and services collectively" despite global uncertainties, he added.

He said regions like Europe are in a stressful situation and most of the developed world is facing high inflation.

The minister suggested the sector to explore new export destinations and focus on innovation and quality.

He also informed that leather and footwear exports to UAE jumped by 64 per cent in November. India has implemented a trade pact with the UAE in May last year.

Further, he said that 'Kolhapuri Chappals' holds huge potential for exports and suggested encouraging hotels to keep this footwear in their rooms.

"Huge traction can be built for the product through appropriate branding and e-commerce can help create the supply chain across the world," Goyal said, adding "there is a huge untapped potential in Kolhapuri Chappals...We can work on new and better designs, comfort and packaging to promote them".

The sector's exports rose 19 per cent to USD 3.66 billion in April-November 2022-23. The target for the fiscal is USD 5.54 billion. The annual turnover of the sector is USD 17 billion (USD 5 billion in exports and remaining domestic sales).

Speaking at the event, Minister of State for Commerce and Industry Anupriya Patel said the huge potential is there to boost exports.

"The world looks at us as a huge and big manufacturing destination...There are a lot of possibilities for us," She said, adding innovation is key for the industry.