The government can offer incentives to the leather sector to boost exports

New Delhi, September 12 () The government can provide incentives to the leather sector to boost exports of this labor-intensive segment, an official said.

As part of a proposal under consideration, the government is likely to increase the duty rate for the leather garment sector for duty-free import of raw materials from 3 to 5 percent, the official said.

The measure would help increase the availability of raw materials at affordable prices and boost exports.

Currently, they obtain the right of three percent under the tax-free import scheme. The scheme allows all members of the Leather Export Council (CLE) to import duty-free raw materials that are used for export purposes.

The government is also considering the demand of exporters to reduce rates of goods and services tax (GST) on footwear with prices above Rs 1,000.

The president of CLE, P R Aqeel Ahmed, said that the reduction in the rate of the goods and services tax on footwear would help improve the competitiveness of products in global markets.

There is a demand to reduce the GST rate to 12 percent in footwear with a price higher than Rs 1,000 of the current 18 percent.

Similarly, there is a demand for reducing the GST rate to 12 percent in raw material for the leather sector of 18 percent.

Currently, the export of leather and its products is approximately USD 6 billion. The main export destinations include Europe and the United States. The sector employs about 42 Lakh people. Exports of leather and leather products fell about 4 percent to USD 473 million in July. RR MR MR