Special Correspondent

Leather identified as one of the thrust sectors

  • Scope for greater market access
  • Cluster scheme to be strengthened

    NEW DELHI: Commerce and Industry Minister Kamal Nath has said States will be urged to cut taxes levied on exporters in a meeting of the Inter-State Trade Council. He said the Centre had already written to State governments to remove octroi on inputs for export items. "They have agreed to do so,'' he disclosed.

    Speaking at the Leather Summit organised by the Council for Leather Exports here on Wednesday, he said the matter would be discussed at the Inter-State Trade Council and was likely to be sorted out. He said the Centre had been telling State governments to remove duties on exports. In turn, he said, States had been suggesting that a scheme should be formulated for reimbursing taxes at the State level. But the Minister felt that since the States were levying these taxes, the schemes should be formulated by them.

    In this regard, he stressed that states would have to become friendly to exporters, or else they would go at more hospitable locations. He noted that the Government had identified leather as one of the thrust sectors to boost manufacturing growth. "Prime Minister Manmohan Singh and UPA Chairperson Sonia Gandhi have been speaking to me on the sector. They see a great potential in it,'' he said.

    He also indicated that Indian leather products would get greater market access under the WTO (World Trade Organization) regime. "Indian leather products will not only get greater market access in developed countries in view of tariff elimination and reduction mechanisms through free trade agreements, regional trade agreements and preferential trade agreements but the cost competitiveness of the domestic manufacturers will improve further in view of gradual phasing out of import duties in India on inputs and machinery,'' he said.

    Earlier, the Minister of State for Industry, Ashwani Kumar, disclosed that the Government was planning a range of initiatives to make the leather industry viable and globally competitive with a view to achieving $7 billion exports by 2010-11. These initiatives would make it globally competitive in terms of price, quality and range of products, he said.

    He said att present leather exports were pegged at $2.7 billion annually and the target had been fixed at $7 billion by 2010-11. In this context, the Government would like to interact with the industry on a regular basis to get inputs on how best it could be achieved. He felt that there was a gap between the resolve to achieve the target and the implementation.

    Plan outlay

    Besides, he suggested restructuring the Rs. 400-crore Plan expenditure outlay for the leather sector, being implemented by his Department. He said restructuring would enable maximum impact of the funding.

    Mr. Kumar also assured the industry that the Government would strengthen the cluster scheme. He said assistance was being given to establish the zero liquid discharge system in common effluent treatment plant in Tamil Nadu and elsewhere.

    He stressed on enhancing the funds allocation for a meaningful export promotion effort globally from the existing level of Rs. 5 crore for the leather sector.