Dear Santa, we'd like a leather jacket

The leather industry has set itself a $3bn export target for ‘05. An ambitious target given that exports are expected to touch $2bn by the end of the current fiscal.
And to get there, the industry is banking on the government to “provide the much-needed level playing field� especially when it’s faced with adverse global economic conditions and increased competition from emerging markets.
Consider this. At $1.96bn, the sector achieved the highest export growth of 23% in ‘00-01. The key task before the industry was to sustain such high-level performance. During ‘01-02, exports marginally fell to $1.93bn. In the first seven months of the current year, April-October ‘02, exports touched $1.1bn. And in all probability, they will be close to $2bn by the end of this fiscal despite recessionary trends in major markets.
�As an industry that has started coming out of reservation only recently, it should be adequately compensated for the deficiencies in various areas, including infrastructure so that we will have a level playing field to compete in the international markets,� said Irshad Mirza, the outgoing chairman, Council for Leather Exports (CLE).
Consequently, unlike in the past, when the industry and the Council looked upon the government for sops on several micro issues, the focus this time has been on macro issues, including income tax concessions for the sector. “Despite our limitations, we have been adding substantially to the government’s forex kitty. However, since ours is a highly climate-oriented industry, we need to import certain chemicals and embellishments for adding value to the produce for which we have approached the government for duty-free import up to 3% of FoB value,� Mr Mirza said.
As of now, the government allows duty-free imports up to 1 per cent of export value for certain categories of leather products, which the Council wants to be extended to others. It wants this 1% increased to 3% for all products as it is now available to leather garments only.
Since power happens to be an essential requirement for the leather industry, especially when several of them are of continuous process in nature, the lack of sustained supply of quality power has forced the industry players to look out for captive power sources. For the industry to derive benefits from this route, it has sought “duty-free purchase� of fuel in the local market. And such a concession has been advanced to several other industries.
Further, the council wants the concessions given to special economic zones being formed in places like Kanpur and Noida, to be extended to leather units, classified as EOU but located outside these zones. Any unit that exports 75 % and more of the production should be given such concessions to enable them to compete in the international markets.
When it comes to infrastructure, tanneries are still way down the “efficiency ladder� and implementing the Tannery Modernisation Scheme on a regular and sustained basis would help. “It was taken up in a small way in ‘00 but a lot needs to be done. Since Rs 400 crore has been allocated to the leather sector during the 10th Five-Year plan, the Tannery Modernisation Scheme should get the focus. Because “Justice delayed is justice denied,� said the outgoing chairman of CLE.