Indian leather exports is likely to reach USD 7 billion

Source: IRIS (22 November 2006)

Indian leather exports is likely to reach USD 7 billion by 2010-11, said Commerce & Industry Minister, Kamal Nath, while addressing the India Leather Summit 2006 - Towards Global Dominance, organised by the council for leather exports (CLE). At present, the export earnings from the leather sector is about USD 2.7 billion, with a growth of around 8%. In a bid to attain the projected levels of export, Nath said annual export growth rate at an average of 20% must be sustained and additional capacities must be created with modern and state-of-the-art production technologies. The tariff elimination and reduction mechanisms through free trade agreements (FTAs), regional trade agreements (RTAs) and preferential trade agreements (PTAs) will expand the market access of Indian leather products in developed / industrialized countries, he felt. While gradual phasing out of import duties in India on inputs and machinery will further improve the cost competitiveness of the domestic manufacturers, Nath said. The government has undertaken several policy and financial initiatives to encourage large domestic and global investments in leather industry. An integrated leather development programme is being implemented with the central allocation of Rs 4 billion to focus on modernisation of manufacturing facilities in all segments of the leather sector. The minister indicated that if required the programme could be extended during the 11th Plan period. However, the sector has hardly attracted investment from overseas. Expressing concerns over it, Kamal Nath said that this trend needs to be reversed through aggressive campaigns, investment promotion programmes and by creating awareness about investment opportunities available in the Indian leather sector. The need to carry a comprehensive survey about the domestic market for leather products should highlight the opportunities for the foreign direct investors. It is only through such a route, the country can attract foreign investors, the minister said. So far, leather industry overseas investments are at an abysmal level of less than 0.15% of the total foreign investments inflow into the country. India has been seen as a great opportunities destination by most manufacturers of leather and leather products from industrialised countries of the West who are looking for shifting their production base to eastern countries especially India, owing to rising labour costs even in China.