India’s exports of leather and leather products dipped four per cent in July 2019. Incentives will be provided to the leather sector with a view to boosting exports from this labor intensive segment. The entitlement rate for leather garment sector for duty-free imports of raw material may be increased from three per cent to five per cent. The move would help in increasing the availability of raw materials at affordable rates and boosting exports. Also, GST on footwear priced above Rs 1,000 may be reduced from 18 per cent to 12 per cent. This is expected to help enhance the competitiveness of the products in global markets. Similarly, GST on raw material for the leather sector may be reduced to 12 per cent from 18 per cent.

Major export destinations for Indian leather and leather products are: Europe and the US. The sector employs about 42 lakh people. The footwear sub-sector accounts for half of India’s leather exports. The leather garment sub-sector produces 16 million pieces a year and accounts for one-tenth of exports. Other products such as articles (wallets, handbags), industrial gloves, harness and saddlery account for a quarter of exports. US companies have turned to leather from India. They have been hit by tariffs on products imported from China.