Leather industry fears supply crunch with export duty cut on raw hide

The move would adversely affect leather value chain from tanning to finished goods, especially at a time when finished leather exports were already down, it says

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Budget 2019: The domestic leather industry has rued the proposal to impose a sharp export duty cut on raw leather and hide from 60 per cent to 40 per cent in the Union Budget 2019 tabled in Parliament last week. Fifteen per cent export duty on EI (Eastern India) tanned leather was also abolished on July 5. At present, the share of these items is not big in the leather export basket, but an increase in their export after budget incentives is expected to create a supply crunch.

Industry players, including leather goods manufacturers and tanneries, are apprehensive the cut proposal would create acute raw material squeeze in the domestic market and ultimately lead to uncompetitive pricing of Indian finished products in the global arena.

Currently, the share of raw hide and leather skin in India’s net leather and leather goods exports, which stood at more than $5.3 billion in 2018-19, is almost negligible due to higher export duty and robust domestic demand. However, leather industry is apprehensive the...read more

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