India may begin Kangaroo skin goods export
NEW DELHI: Leather shoes and other finished products made of kangaroo skin may soon be added to India’s export list as the domestic industry senses an opportunity to import the commodity from Australia at zero duty since the two nations signed a free trade pact earlier this month.
The $2 billion finished leather goods market in Australia has so far been dominated by China with an almost negligible Indian share, but that might change soon. “India has potential to leverage the FTA (free trade agreement) to enter in the Australian market in the big way,” said Rajendra Kumar Jalan, director of AFPL Global, a Kanpur-based leather goods exporter. “In fact, one of our Australian customers has seen 1.5 fold jump in sales of
Indian leather goods even before the FTA came into force.”
India and Australia on April 2 signed an Economic Cooperation and Trade Agreement (ECTA), an interim comprehensive pact that provides zero duty exports to almost 100% tariff lines from India to the Australian market and 85% imports from India. The agreement, expected to be effective in about four months, will eventually pave for a full Comprehensive Economic Partnership Agreement (CEPA).
Australia is now looking beyond China for manufactured items like leather goods and footwear, said Jalan, who is also vice-chairman of the Council for Leather Exports (CLE). “Besides, Chinese industry is also facing some labour issues, which gives us edge over them as Indian products are good in terms of design and quality,” he said.
Traditionally, the Australian leather market has been dominated by China, with less than $75 million worth of Indian goods sold. However, tensions between Canberra and Beijing has brought a series of Chinese trade sanctions on Australian exports, including coal, beef, seafood, wine, barley, raw and finished leather. This could spell an opportunity for the Indian leather industry.
Meanwhile, the Indian government is considering a policy push to the $18 billion Indian leather sector because it involves mainly smaller businesses providing employment to more than 4.4 million people.
“Commerce and industry minister Piyush Goyal recently took a review of the sector where several suggestions were made to boost exports that includes leveraging the Australian FTA and launching a productionlinked incentive (PLI) scheme for the sector,” a government official said, requesting anonymity.
“India can source raw materials, particularly kangaroo skin from Australia, which will also depend on direct shipping facilities to reduce transportation time. All such issues are being considered,” Jalan said.