To tackle imports, leather industry seeks govt help

The leather industry has made recommendations such as an image makeover, building of clusters, a friendlier FDI policy, and ramping up of infrastructure to ensure reduction in imports.

At present, 30-40 per cent of leather goods, mostly shoes, are imported from China. The Prime Minister recently named the furniture, air conditioner, and leather sectors as priority ones in which imports could be reduced.

According to commerce ministry data, India imported leather and leather products worth $1.01 billion in FY20. Industry estimates half of it to be finished products; retailers are increasing imports from China. Aqeel Panaruna, chairman of the Council for Leather Exports (CLE), said that besides raw material, India imports components like shoe sole, insole and others that need to be manufactured locally.

He added that the government should set up more leather parks and ease FDI policy. Recent developments like the definition of MSMES, differing payment, and subintervention have given some comfort.

Reducing the import of finished products from China is another area that warrants attention, he cautioned.

Rafeeque M Ahmed, president of the All India Hides and Skins Tanners and Merchants Association, said increasing duty alone would not reduce imports. The focus should be on developing and eco-system like that of China Price and variety are major challenges. Indian firms quote $10, compared to $8 by Chinese ones.

While an Indian firm offers a mere four varieties to a retailer seeking 40 varieties or designs, China has created an interesting sourcing model.

Quanzhou, dubbed as ‘Shoe City’, churns out more than 500 million pairs of sneakers annually, accounting for a quarter of the country’s overall output.