The Indian leather and footwear industry is actively seeking the extension of the Production-Linked Incentive (PLI) scheme to bolster domestic manufacturing, enhance exports, and create employment opportunities.
Council for Leather Exports (CLE) Initiatives:
Advocacy for PLI Extension: In June 2024, CLE Chairman Rajendra Kumar Jalan urged the government to extend the PLI scheme to the leather and footwear sector. He emphasized that implementing the PLI would lead to a structural transformation of the industry, positioning India as a central manufacturing hub. The anticipated benefits include an incremental investment of approximately ₹6,000 crore and the creation of about 2 million jobs, both directly and indirectly.
Policy Recommendations: Jalan also proposed removing import duties on wet blue, crust, and finished leathers to enhance the price competitiveness of value-added products. Additionally, he advocated for eliminating export duties on all value-added leathers, including crust leathers, to boost exports by at least $1 billion over the next two to three years.
Government Considerations:
Potential Inclusion in PLI Scheme: The government is considering extending the PLI scheme to labor-intensive sectors such as toys, leather, and footwear. This initiative aims to maximize the utilization of the ₹1.97 trillion (approximately $23.70 billion) allocated for the PLI scheme to boost domestic manufacturing and exports.
Consultations and Policy Development: Discussions regarding including the leather and footwear sectors in the PLI scheme are ongoing. The Department for Promotion of Industry and Internal Trade (DPIIT) is exploring initiatives to support these sectors with ongoing consultations.
The leather and footwear industry significantly contributes to India’s manufacturing sector, with exports valued at approximately $5.88 billion. The industry has demonstrated resilience, with a growth rate of 13% between 2015 and 2019 and a 20% growth in 2021-2022 compared to the previous fiscal year.
Extending the PLI scheme to the leather and footwear sectors is expected to attract substantial investments, modernize production facilities, and create employment opportunities, enhancing India’s global competitiveness.
