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Leather sector set to trigger big investment

Staff Reporter

Emphasis is on infrastructure, environmental safeguards

CHENNAI: One million new direct and indirect job opportunities and investments exceeding Rs. 1,000 crores will be created as a result of the modernisation and expansion programmes being undertaken by the Indian leather industry to increase its exports to $ 5 billion by 2010.

A large number of the new jobs will be for women, especially in the footwear sector, M. Rafeeque Ahmed, chairman of the Council for Leather Exports (CLE), told presspersons here on Tuesday.

Other factors that would lead to creation of new jobs in the industry that presently employed 2.5 million people was the growing global demand for leather products and the interest in India shown by importers, who now source their requirements from China.

Making them look to India was the increase in the wages and energy cost in China.

Noting that the Indian leather industry was on dot to achieve the $ 5 billion export target, he said that in 2004-05 the export was at an all-time high of $ 2.38 billion. Exports had grown by 12.65 per cent in the last two years.

The emphasis in the industry was on infrastructure building with upgradation of environmental safeguards and promotion of dedicated leather and leather product industrial parks.

Coming as a shot in the arm for the leather industry is the recent Central approval for a Rs.290 crore central assistance for a modernisation/technology upgradation programme. "The (Union) Cabinet has approved it and the notification is expected in two weeks," he said. The Central allocation was expected to generate a total investment of Rs.1,200 crore in two to three years.

There was a further Central allocation of Rs.110 crores for promotion of exclusive leather and leather product industrial parks, HRD mission, sending business delegations to secure overseas investments and partnerships and country brand building.

The regional chairman of the CLE, Habib Hussain, said a footwear component park was coming up on 21 acres at Irungattukottai in Tamil Nadu. It would include design studios, warehousing facilities and laboratories. A footwear complex was also proposed on 125 acres there "to locate large units and to take the Chinese (competitors) head-on."

Mr. Ahmed said executives of a Chinese company planning to set up a unit for producing 60,000 pairs of shoes a day in India were in Chennai recently. On the issues affecting the industry, he said the levy of service tax on air freight was a matter of concern.

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