Leather exporters are asking the government to formulate a new policy on investment and job creation

The Leather Export Council, the apex body for leather and footwear exporters, has asked the government to formulate a national policy for the sector aimed at attracting investment, increasing supplies to India and creating jobs.

In a letter to Niti Aayog CEO BVR Subrahmanyam, CLE said that while there are programs and support measures at the central and state levels, there is a need for holistic development of the entire sector through national policies.

Elements of the proposed policy, she said, could include incentives for setting up production units, employee training, measures to support the adoption of sustainable technologies and innovative products.

“This policy should cover the entire supply chain of the sector, from raw materials to finished products, including processing, product development, marketing, supply chain management and backward integration,” the council said.

Explaining the importance of the policy, CLE Executive Director R. Selvam said the sector needs a national policy as it is a labour-intensive sector employing around 4.4 million workers, of whom over 85% are women.

“The sector brings enormous socio-economic benefits. This policy would help the industry increase exports and create a huge number of jobs,” Selvam told PTI.

The council asked the government to implement a production-linked incentive program for the entire supply chain of the footwear and leather industry, as well as the machinery segment.

She added that there is a need to refine the policy of the Special Economic Zone, focusing on increasing productivity through flexible labor law, reducing the tax burden on the sale of goods on the domestic market.

Further, CLE suggested that the policy should include an infrastructure development plan in all leather and footwear clusters to make them smart clusters, logistics and monetary management measures, lines of credit and insurance.

“I would request you to formulate policies to facilitate growth and development and provide additional employment opportunities to at least two million youth in the next seven years,” said CLE chairman RK Jalan.

He also called for a meeting of global CEOs of major leather goods and footwear brands with secretaries of state for industry.

“Such an event will help in attracting more investments from brands,” he said, adding that there is a need to create plug-and-play factory models where ready-to-use factory floors along with all required infrastructure and support services are provided by the government.

The industry is expected to grow at a CAGR of 18-20% over the next six years. Its turnover is expected to reach $47 billion by 2030 from $16.7 billion in 2023-2024.

The sector’s exports fell by about 10% to $4.3 billion in 2023-24.