The representatives from footwear, leather, engineering goods and textiles sectors have urged the NITI Aayog to initiate several tweaks in duties and taxes. The sectors have sought to reinstate import duty exemption on wet blue, crust and finished leathers (HS Numbers 4104 to 4115). These sectors have also requested for lowering of duty from 20 percent to nil on import of footwear components and reinstatement of duty-free import scheme for leather garments, footwear and other leather goods.
The representatives have also sought to levy export duty only on raw hides, skins, wet blue leathers, raw fur skins instead of general description of leathers. On all other value added leathers (including crust leathers and finished leathers) free export should be allowed without any export duty, norms, inspection, testing or certification, the representatives requested.
India is a contract manufacturer for value-added leather products and footwear for famous brands like Geox, Clarks, H&M, Ecco, Hush Puppies, etc. The leathers imported are as per specifications of these brands who nominate the overseas suppliers from whom the leathers are to be bought, considering the superior tanning technology and finishes.
| S. No. of theCustomsNotification.27/2011 | Chapter or heading or sub heading or tariff item | Description of Goods | Rate ofduty |
| 26 | 41 | E.I. tanned leather | Nil |
| 27 | 41 | Snake skin | 10% |
| 28 | 41 | Finished leather of goat, sheep and bovine animals and of their young ones * | Nil |
| 29 | 41 | Clothing leather fur suede/ hair, hair-on suede/ shearing suede leathers (as per ISI norms 8170) | Nil |
| 30 | 41 | Fur leather | Nil |
| 31 | 41 | Cuttings and fleshing of hides and skins used as raw materials for manufacturing animal glue gelatin | Nil |
| 32 | 41 | Luggage leather- case hide or side/suit case/ hand bag luggage/ cash bag leather | 25% |
| 33 | 41 | Industrial leathers, namely:- | |
| (i) Cycle saddle leathers | 15% | ||
| (ii) Hydraulic/ packing/ belting/ washer leather | 15% | ||
| (iii) Industrial harness leather | 25% | ||
| 34 | 41 | Picking band leathers | 15% |
| 35 | 41 | Strap/ combing leathers | 15% |
| 36 | 41 | Miscellaneous leathers, namely:- | |
| a) Book binding leathers | Nil | ||
| b) Skiver leathers | Nil | ||
| c) Transistor case/ camera case leathers | 25% | ||
| 37 | 41 | Fur of domestic animals, excluding lamb fur skin | Nil |
| 38 | 41 | Shoe upper leathers, namely:- | |
| (a) Bunwar leather | Nil | ||
| (b) Kattai/ slipper/ sandal leather | Nil | ||
| (c) Chrome tanned sole leather | Nil | ||
| 38 A | 41, 43 | Hides, skins and leathers, tanned and untanned, all sorts but not including manufactures of leather | 40% |
| 38 B | 4101 | Raw Hides and Skins of Buffalo | 30% |
| 39 | 4301 | Raw fur lamb skins | 10% |
The industry told the government that these leathers can't be sourced in India as they differ in terms of texture, grain and thickness – unique to the animal species in foreign countries. Hence the levy of import duty will affect India's long business tie-ups with these brands.
India's footwear and leather industry provides jobs to 4.42 million people, 40 percent of whom are women, with 95 percent of the production in the sector taking place at MSME units.
The industry told the government that it is aiming to reach a turnover of $47 billion including a domestic turnover of $33.4 billion and export turnover of $13.7 billion by 2030. Currently, the turnover of the industry is $17.26 billion including domestic industry turnover of $12 billion and export turnover of $5.26 billion.
The industry has claimed that the exemptions sought will enable growth of the sector by providing cheaper raw materials. The industry fears that cost-competitiveness may drive several brands to China or cheaper labour markets like Bangladesh, Indonesia, Cambodia or Vietnam.
(Edited by : Keshav Singh Chundawat)
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