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Leather sector appeals for stimulus package
Feb '10
The labour-intensive leather industry seeks government's support till the international market becomes stable and regains its growth-rate. The sector, which is concentrated in the SME segment has urged the Central Government to release a stimulus package for the sector in the up-coming 2010-11 budget, in order to cut down the transaction costs and improve its price competitiveness in international market considering the competition from countries like China and Vietnam.

The stimulus packages announced by the government last year saved the industry from witnessing any major shut down or lay-offs, due to recession, which was experienced by the leather industries of other countries across the globe. However, the recession has taken its toll on global leather market, shrinking it by 25 percent since past one year.

Various stimulus packages from the government for leather sector offered it a boost during intricate situations, said the Chairman of Council for Leather Exports, Mr. Habib Hussain. After witnessing a negative business performance for around a year, the industry experienced a mounting trend from October to December, this fiscal.

He further pointed that the financial amount to the sector needs to be reviewed to make it competitive in the global trade as well as to reduce the transaction cost and consider each competitive factor.

The industry seeks extension of interest subvention scheme for one more year, increasing the limit of Duty Free Import Scheme (DFIS) from three percent to five percent and complete exemption of post manufacturing services from service taxes, informed an industry expert.

In a bid to assist the imports of hides and skins, industry requested the government to mull over the establishment of animal quarantine and certification stations in Jalandhar and Kanpur. It also wants the government to allow re-export of hides, skins and semi-processed leathers from bonded warehouses, without any export duty as well as to extend one percent additional scrip under Status Holders Incentive Scrip Scheme for finished leather segment.

All leather exports including, finished leather, footwear, components, leather goods, saddler and harness, but excluding garments, witnessed fall in past one year.

Fibre2fashion News Desk - India

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