Chennai: Close on the heels of the Centre signing a trade agreement with the European Union (EU), the Union government has initiated steps to boost leather products and non-leather footwear exports. The development will also increase employment opportunities in the sector. “I also propose to allow duty-free imports of specified inputs, which is currently available for exports of leather or synthetic footwear, to exports of shoe uppers as well. I propose to extend the time period for export of the final product from the existing six months to one year for exporters of leather or textile garments, leather or synthetic footwear and other leather products,” Union finance minister Nirmala Sitharaman announced in her budget speech on Sunday.According to Israr Ahmed, former vice-president of the Federation of Indian Export Organisations (FIEO) and managing director of Farida Group (a contract manufacturer for global footwear brands), shoe uppers, which comprise only the top portion of a stitched shoe, are exported to factories around the world.Specific materials need to be imported for this purpose, which are processed in factories in India, and the final product is exported. So far, the specific imports required for manufacturing shoe uppers have been kept within the bracket of duty. “Now, the Union government has announced that these will be brought under the Import of Goods on Concessional Rate of Duty (IGCR), making them duty-free. When specific inputs are imported under the IGCR, they have to be exported within six months, or exporters need to get an extension for another six months. Now, the condition for extension has increased to one year. This will help in ease of doing business.”Noting that both developments will help the leather and non-leather footwear sector, particularly small manufacturers, he said nearly 10% of the sector is engaged in making shoe uppers. “Going forward, a number of industries will benefit, thanks to the trade deals with the EU and the UK. A lot of factories are dependent on Europe, where uppers are exported. The announcements will help exporters increase their market share in the future,” Ahmed added.The Council for Leather Exports (CLE), an export promotion council functioning under the aegis of the commerce and industry ministry, underscored that the move will enhance exports of this value-added product, which stood at $222 million in 2024-25. “It has the potential to generate roughly two lakh to three lakh additional jobs,” it added.
