Government plans leather parks now

NEW DELHI: The government is considering establishment of small integrated leather parks –– on the lines of the textile parks –– to give a leg-up to the labour-intensive industry. Finance minister P Chidambaram will meet representatives of the leather industry next week to discuss the need for setting up such parks.

Minister of state for commerce Jairam Ramesh has written to Mr Chidambaram on the need to set up five such parks during the Eleventh five year Plan. Addressing a media conference here on Friday, Mr Ramesh said that while India’s export of leather products had touched $3.1 billion in 2006-07 and there was a need for expansion of capacity and diversification in order to tap a larger share of the global market. With the international market for footwear expanding fast, the government wants to increase the share of footwear in total leather exports to 60% from the present 38%.

According to the minister, the industry needs to make forays into the largely untapped US market. For that, there was a need to move from the high value segment to the high volume segment. At present India exports footwear mostly to the EU which has a market for high value products. “It is time for Indian footwear exporters to enter the US market where there is a demand for cheaper footwear,” he said. Indian footwear is mostly in the range of $15-$20 per pair, whereas the demand in the US is for products priced between $4 and $ 8. The lower segment is dominated by China and Vietnam and Indian exporters have to re-orient themselves to move into the segment, Mr Ramesh said.