Benefits to leather, textile sectors restricted to 6 months
NEW DELHI: The Union Ministry of Commerce and Industry on Saturday announced that the incentives offered recently under the Rs. 325-crore package for leather and textile sectors to tackle the global slowdown would be available only on shipments to the U.S. and the Europe Union and the package was limited to six months from April 1.
Addressing media persons here, Union Commerce and Industry Minister Kamal Nath said: “In pursuance of this announcement, it was decided to grant benefits under market linked focus product scheme at a special rate of two per cent on value of exports of all leather products and apparels. This incentive will be available to exports of products to the EU and the U.S. only.
This special benefit is for a limited period of six months.” The benefits would accrue on exports made from April 1. The U.S. and the EU account for 80 per cent of India’s leather exports, valued at $3.5 billion.
This year, the growth was likely to be flat, Leather Export Promotion Council Chairman Habib Hussain said. Sixty per cent of the apparels exported from India go to the U.S. and the EU, earning $9.7 billion in 2007-08.
Industry estimates suggest that the garment industry employs seven million people, including 3.9 million in the export sector. There are 2.5 million people employed in the leather industry.
Mr. Nath said the estimated quantum of benefits in the form of duty credit scrip would be nearly Rs. 325 crore. The primary objective of this incentive was to provide support to these two employment-oriented sectors.