In the latest Union Budget, the current ruling dispensation’s relentless efforts to catapult India into a global manufacturing destination and become self-reliant or Atmanirbhar have witnessed a momentous impetus.
The Indian government has announced a plethora of incentives for the legacy sectors with a major focus on its resilient-yet-versatile leather and footwear industry. It is one of the most labour-intensive sectors, generating employment for more than 4.42 Mn people.
High heels
India proudly holds the position of being the second-largest producer and consumer of footwear globally. The country is also the second largest exporter of leather garments, third in saddlery and harnesses and ranks fourth in leather goods worldwide., These make India play an indispensable role in the global supply chains, enabling economic emancipation while conserving native craftsmanship.
However, heavy dependence on the import of certain raw materials, and machinery with limited adoption of the latest technology and skills has inhibited the sector’s potential to contribute to nation-building. The immense focus given to the leather and footwear industry highlights a stitch in time—further facilitating a conducive manufacturing ecosystem and enabling the domestic industry to become globally competitive.
No shoestring budget
Putting its best foot forward, an impactful announcement of formulating a focus product scheme for the footwear and leather sector aiming to create 2.2 Mn jobs, aspiring a turnover of INR 4 Tn and exports of over INR 1.1 Tn, will enhance the sector’s productivity, quality and competitiveness manifold.
Focusing on boost rapid growth and employment generation in the industry, the scheme will support design capacity, component manufacturing and machinery required for the production of non-leather quality footwear. Complete exemption from Basic Custom Duty (BCD) for Wet Blue Leather, which is a vital raw material, will not only reduce input and bolster domestic value addition but will enormously foster export competitiveness, correct inverted duty structure solidify the manufacturing capabilities of the sector.
Similarly, full exemption from export duty on crust leather, another critical raw material, will support tanneries across the country and promote quality enhancement for the leather industry.
“These incentives will accelerate foreign investments, advance design capabilities, optimise manufacturing potential—propelling India as the ‘factory of the world’ for the leather and footwear sector,” says Sujatha UG, Vice President, Textiles, Leather, Footwear and Energy at Invest India.
“The leather and footwear industry has evolved from its fledgling phase to a resilient one having the potential to spearhead India’s economic growth story. The cascading effects of increased standard of living with higher disposable incomes, luxury-oriented inclination due to rapid premiumisation and vibrant demography with higher consumerism have led to unprecedented demand domestically, making India a lucrative market for global players.”
Progressive simplification and rationalisation of doing business aspired through these budgetary initiatives will not only insulate the industry from the vagaries of global economic uncertainties and truly nudge this industry’s footmarks from ‘Make in India to Make for the World’.
This blog is written by Tripti Pandey
