From the Desk of Chairman

Aqeel_Ahmed

Chairman Column

Dear Member

Leather and its related products always have predominance in the export arena and in the global market as reflected by the data. According to the data of International Trade Centre (ITC), Geneva, the global trade of leather footwear during 2018 was USD 54.73 billion in the total global footwear trade of USD 134.33 billion. Also, the data compiled on the basis of IMF’s World Economic Outlook database and World Bank’s world databank, leather footwear constitutes a share of 39% in value terms of global footwear exports, while footwear of rubber, plastics, textile and other materials constitute the balance 61%. According to data published by Directorate General of Commercial Intelligence and Statistics (DGCI &S) India’s export of leather, leather products and leather footwear constituted a huge share of 93.10% in total export of USD 5.69 billion in 2018-19 from Indian leather and footwear sector.

 

With a huge and growing global market, we see very good opportunities for growth in 2020.

The non-leather footwear also has a huge potential for export growth. Considering the non-availability of domestic production base for PU which is the basic raw material for producing non – leather footwear and also high import duty of 20% on this item, CLE has been requesting for providing duty exemption on import of PU at various forums. Besides, CLE is promoting the investments under Make in India/ Invest India in the non-leather footwear segment, considering its huge potential for growth.

 

Plug-and-play model of Factories

In order to enhance production levels, there is a need for not only upgrading the infrastructure in the existing leather, leather products and footwear clusters but also create new clusters with Plug-and-play model of factories i.e. ready to use factories. We have requested the Government to provide such Plug-and-play model of factories, so as to attract domestic and foreign investments, considering the huge cost of land for setting-up new projects.

India Leather Week 2020

Series of events scheduled to be held in Chennai (detailed below) as part of India Leather Week 2020, will augment the growth potential of the industry.

The 35th edition of India International Leather Fair (IILF) will be held at the Chennai Trade Centre from January 31- February 3, 2020 and will have on display the entire range of products relating to leather industry from raw material to finished products also machinery, chemicals, components etc., . This fair serves as a platform for not only sourcing but also understanding the latest trends in technologies. Over 300 domestic and 150 overseas companies will be participating in this fair in an area of more than 10,000 sq. mtr.

Coinciding with IILF, the Council for Leather Exports (CLE) will be organizing the 5th edition of Designers Fair (Feb. 1-3, 2020) at Hotel ITC Grand Chola in which 51 designers from 47 companies and 10 countries are participating. This fair provides a platform to Indian manufacturers and exporters to meet the popular overseas and Indian designers not only to procure the latest designs but also enter into long term business tie-ups in design development.

CLE will also be organizing the 3rd edition of Raw Material Sourcing Meet at ITC Grand Chola on February 1, 2020. This event will witness one-on-one meetings between Indian companies and about 30 overseas suppliers of leathers.

 

The 2nd edition of Executive Forum organized by CLE is scheduled on Feb. 1, 2020 will bring together Central Government officials and stake holders of the industry under one platform so as to discuss about challenges and opportunities of the sector.

 

CLE Marketing events

CLE had organized 12 overseas marketing events with support under Market Access Initiative Scheme (MAIS) during 2019-10 of Department of Commerce, Govt. of India. 2 more events will be organized within March 2020.

Besides, 9 overseas events have been organized/ planned during 2018-19 on self – financing basis while 2 overseas events were organized with support from Ministry of MSME, Govt. of India.

These marketing events cover all major and potential markets in 14 countries namely USA, Germany, China, Vietnam, Russia, Chile, Peru, Bangladesh, Australia, Japan, Hong Kong, Italy, Guatemala and Poland.

With good market potential, aggressive marketing campaign and expected additional support measures of the Government, the leather, leather products and footwear industry aims at good export growth in 2020.

Implementation of IFLADP

It gives me immense pleasure to know that execution of many of the sub-schemes of the Indian Footwear, Leather & Accessories Development Programme (IFLADP) has progressed considerably and it is in full swing, with Department for Promotion of Industry & Internal Trade (DPIIT), Govt of India putting up an effective mechanism for scrutiny and approval of the proposals. As per current status, a few key updates are given below:

1)       494 proposals for modernization, technology upgradation and capacity expansion in the manufacturing units have been received with total project investments of Rs.864.40 Crores.  Out of this, 166 proposals already approved involving total investments of Rs.285.67 Crores, and grant approved was for Rs.75.34 crores.  Another 83 proposals involving total investments of Rs.137.02 Crores with eligible grant worked out at Rs.35.46 Crores, are under final scrutiny and expected to be placed before the competent authority for approval very soon. (Data status as of 03.01.2020)

2)       Upgradation projects for 11 Common Effluent Treatment Plants in Tamil Nadu have already been approved during FY 2018-19 involving combined total project cost of Rs.506.47 Crores. The execution of these sanctioned projects have progressed and are in full swing during the current FY 2019-2020. The proposals for upgradation of CETP in Jalandhar and Kolkata have already completed the appraisal, and are currently in final stages of scrutiny and expected to be placed before competent authority very soon.

3)       Establishment of new greenfield mega cluster in Kothapatnam, Andhra Pradesh is currently under implementation by the State Government promoted SPV in a land area of 537 acres. All requisite sanctions, permissions, approvals from both GOI and GoAP departments have been obtained by the SPV

4)       Establishment of a new cluster inside the Calcutta Leather Complex has recently been given final approval by the DPIIT.  This brownfield project would be spread over an area of 108.07 acres inside the Calcutta Leather Complex, Bantala, and Kolkata Metropolitan Development Authority (KMDA) is the SPV for this project.

5)       Establishment of yet another new cluster in Maharashtra has been recently given ‘in principle’ approval by the DPIIT.  This new cluster is proposed at Ratnagiri District, which would be implemented by LIDCOM, a public sector undertaking of the State Government.

6)       The primary skill development training to the unemployed persons and subsequent placement in the manufacturing units for gainful employment, are being undertaken by the FDDI, CFTI & Webcon Consulting India Ltd.  The skill upgradation training to the existing workforce is also being undertaken by CFTI and Govt College of Engineering and Leather Technology.

IFLADP is turning out to be one of the most important interventions of the Government of India for growth and industrial development of the industry. The CLE has been coordinating with the Implementation Agencies and DPIIT on regular basis to ensure smooth execution of the sub-schemes. The CLE is providing active advice and guidance to the industry in submitting their applications in the online portal as per guidelines, and industry outreach events are regularly being held across the clusters. As per the views expressed by the industry, the CLE has already approached Government of India on many occasions with a request to consider extending the implementation period of the IFLADP atleast by one more year i.e.., till March 2021 which will enable the industry to make full use of the sanctioned outlay. The DPIIT is actively considering our request and we are eagerly awaiting for formal Notification in this regard.

 

Meanwhile, the DPIIT has initiated the exercise of evaluation/appraisal of the IFLADP and assigned the task to Indian Institute of Foreign Trade (IIFT).  On the request of IIFT, the CLE is organizing the Interaction meetings for the IIFT in the industry clusters to have discussions with the industry and elicit the views and feedback on the sub-schemes. The CLE is also facilitating and coordinating the field visits to a few manufacturing units and CETPs in the clusters. Already such interventions has been taken place in Kanpur & Unnao and Kolkata & Bantala during January 13-17, 2020, followed by in Chennai, Ranipet & Ambur during January 21-23, 2020, in New Delhi on Jan 24, 2020, and final intervention is scheduled in Agra on Jan 28, 2020.  The evaluation and appraisal report of IIFT would be a vital factor, which will help the DPIIT to take further course action for continuation of IFLADP and way forward. The CLE is closely coordinating with IIFT in all aspects of the evaluation and appraisal.

 

With best wishes

 

P.R. Aqeel Ahmed
Chairman
COUNCIL FOR LEATHER EXPORTS