The Department for Promotion of Industry and Internal Trade (DPIIT) has proposed a reduction in GST rates for certain segments of the leather industry, aiming to provide much-needed relief to manufacturers and boost the sector’s competitiveness. The recommendation focuses on lowering GST rates for leather goods, footwear, and raw materials, particularly in the affordable price categories, to encourage domestic production, enhance market demand, and strengthen the industry’s position in global markets.
The leather sector, heavily reliant on micro, small, and medium enterprises (MSMEs), has faced challenges due to high production costs and increased competition from global players. The DPIIT’s move is expected to ease the financial burden on these enterprises, enabling them to scale operations and improve their profit margins. Additionally, the GST rate reduction is anticipated to drive consumer demand for leather products by making them more affordable in both domestic and export markets.
This proposal aligns with the government’s vision of supporting the leather industry under initiatives like Make in India and the Leather Development Programme. If approved, the rate cut could also facilitate job creation, bolster the sector’s contribution to the economy, and enhance the global appeal of Indian leather goods. Stakeholders have welcomed the proposal, viewing it as a vital step toward fostering growth and sustainability in the industry.
