India’s leather and leather products exports dipped four per cent in July 2019. Yearly decline was about 13 per cent. India is the second largest global exporter of leather garments. Being a consumer oriented sector, and predominantly concentrated in the micro, small and medium segment, the leather and footwear sector has been facing challenges on the export front due to factors like recessionary trends and fierce price competition. Major export destinations include Europe and the US. The sector employs about 42 lakh people.
Easy and timely availability of credit with affordable interest levels is extremely important for the leather and footwear sector as this alone can help in tapping the huge opportunities available in global markets. In this context, major steps are being contemplated including measures to improve trade credit flows and transmission of interest rate cuts by banks and monitoring export finance through an inter-ministerial group in the department of commerce. Priority sector lending norms for export finance are expected to galvanize the sector particularly small and medium units which have been affected by the slowdown. To help revive leather garment exports, the industry has requested for an enhancement of the duty free limit from three per cent to five per cent of freight on board value of exports.