New Delhi: Huge export opportunities are present in Russia for domestic leather and footwear industry, Council for Leather Exports said on Friday.
Russia has imported leather and footwear worth $3.9 billion in 2018, and India’s exports to that country stood at only $52.6 million, said chairman of Council for Leather Exports (CLE), Panaruna Aqeel Ahmed.
‘The figures clearly reflect the export opportunities for domestic players in the Russian market. It will play a crucial role in achieving our envisaged double-digit export growth levels in the coming years,’ Aqeel said in a statement. Russia is the 13th largest global importer of leather, leather products and footwear.
To penetrate the Russian market, he said, the council is not only looking at participation in fairs like Mosshoes, but also at collaboration with Russian trade and business associations by inviting them to participate in reverse buyer-seller meets in India.
Last week, the chairman led a delegation of 24 leading Indian exporters of leather products and footwear to Russia to participation in the Mosshoes Fair in Moscow. Mosshoes is the biggest exhibition for footwear and leather products, witnessing participation of over 1,000 brands across the globe. India’s total exports of leather and footwear products was $5.7 billion in 2018-19. The current major export destinations for the sector include Europe and the US. The sector employs about 42 lakh people.
Incentives to leather sector
The government may provide incentives to the leather sector with a view to boost exports from this labour intensive segment, an official said.
As part of a proposal which is under consideration, the government is likely to increase entitlement rate for leather garment sector for duty-free import of raw material from 3 per cent to 5 per cent, the official said. The move would help in increasing availability of raw material at affordable rates and boosting exports.
Currently, they get entitlement of three per cent under the duty-free import scheme. The scheme allows all members of Council for Leather Exports (CLE) to import duty free raw material used for export purposes.
The government is also considering the demand of exporters to reduce rates of Goods and Services Tax (GST) on footwear priced above Rs 1,000. CLE Chairman P R Aqeel Ahmed said that reduction in the rate of goods and services tax on footwear would help enhance competitiveness of products in the global markets.
Demand on footwear
There is a demand for reduction of GST rate to 12 per on footwear priced above Rs 1,000 from the current 18 per cent. Similarly, there is a demand for cut in GST rate to 12 per on raw material for the leather sector from 18 per cent.
Currently, export of leather and its products stands at about $6 billion. Major export destinations include Europe and the US. The sector employs about 42 lakh people. Leather and leather products exports dipped by about 4 per cent to $473 million in July.