The Tamil Nadu government on Tuesday unveiled the Footwear and Leather Products Policy 2022, through which it aims to attract investments to the tune of ₹20,000 crore and create over two lakh jobs. This policy will be valid till March 31, 2025, and will be periodically revised.
According to the policy unveiled by Chief Minister M.K. Stalin, two special packages will be offered - one for footwear and leather products (FLP) manufacturing and the other for FLP design studios. Investments made from April 1, 2022 will be considered eligible for the incentives.
Under the first package, considering the higher turnover-to-asset ratio in FLP manufacturing, a turnover-based subsidy shall be applicable as a percentage of the turnover in each financial year. Industries allied to footwear manufacturing or component industries located outside clusters shall be eligible for a fixed capital subsidy of 10% of investment in eligible fixed assets, to be disbursed in 10 equal annual instalments. The company could choose to avail itself of the fixed capital subsidy from the date of commercial production or upon achieving the minimum eligible investment threshold of ₹150 crore and the minimum employment threshold of 100 jobs, whichever is later. The government has also said it shall reimburse 50% of the physical and digital marketing expenses of FLP manufacturing units that export more than 50% of their products, capped at ₹20 lakh per year per firm, up to a period of five years.
FLP design centres shall be eligible for a fixed capital subsidy of 5% of investment in eligible fixed assets disbursed in five equal annual instalments upon completion of the minimum investment and employment criteria. Design centres established in greenfield or brownfield clusters will be eligible for reimbursement of 50% of rental expenses, up to ₹30 lakh per year, within the standard investment period.
The government will create new non-leather footwear clusters in the form of footwear parks of 30-50 acres, with plug-and-play facilities, through its agencies such as SIPCOT/SIDCO and public-private partnerships. Further, given the high level of women’s participation in the sector, working women’s hostels will be developed in or around the clusters by SIPCOT with funding from the Tamil Nadu Shelter Fund.
