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Leather export sector not too happy with new package

Jan '09
The Leather Export Sector is disappointed that the second stimulus package for revival of the economy & business has very little to offer to them. The only additional incentive given to exporters is the extension of the DEPB Scheme up to December 31 2009. As leather sector exporters mostly avail the Duty Drawback Scheme and not the DEPB scheme for duty remissions, this announcement is not of much significance to the sector.

As per latest feedback from leather sector exporters, buyers across markets are delaying fresh orders, Huge discounts are being sought on existing orders, Payments are being inordinately delayed, and many Exporters who had until recently serviced previously placed orders, have nil orders-on-hand. Along with an uncertain future is the fear that thousands of jobs could be lost over the next few months.

In this background the Council for Leather Exports has represented to the government for immediate measures in the form of revision of Drawback rates to pre-revised level of 2007-08, Enhancement in the Duty free Import limit for manufacturer-exporters from the existing 3 to 5% of the realized FOB Export Turnover; Increasing weightage for leather products from 1.25% to 2.5% under the Focus Product Scheme, and extending the Focus Market Schemer to EU & USA for leather products as these 2 markets account for 75% of Indian leather sector exports.

We have also requested for complete removal of excise duties for leather products and footwear as is being allowed for the textile sector. To capitalize on the potential of a robust and growing domestic market for footwear & leather products, the local organized manufacturers may be allowed to access our retail market by removing excise duties on footwear/other leather products and bring the leather sector on par with the textile sector.

It is the plea of the leather sector which is a significant foreign exchange generator for the economy and which is a large volume employment provider, particularly in rural /semi urban areas; that the above representations made towards reviving export prospects and business be expeditiously addressed.

Council for Leather Exports

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