The government is likely to extend an incentive scheme for leather and footwear industries, IFLADP, till 2025-26 with an outlay of Rs 1,700 crore, to further boost manufacturing, exports and job creation, an official said.
The commerce and industry ministry has submitted a proposal for the implementation of the Indian Footwear Leather and Accessories Development Programme (IFLADP) with an outlay of Rs 1,700 crore, to be incurred during 2021-22 to 2025-26, the official said.
The Union Cabinet might approve it soon, the official added.
The programme has six components - Sustainable Technology and Environmental Promotion (proposed outlay Rs 500 crore); Integrated Development of Leather Sector (proposed outlay Rs 500 crore); Establishment of Institutional Facilities (Rs 200 crore); Mega Leather Footwear and Accessories Cluster Development (Rs 300 crore); Brand Promotion of Indian Brands in Leather and Footwear Sector (Rs 100 crore); and Development of Design Studios (Rs 100 crore).
The expenditure finance committee, under the finance ministry, has already approved the commerce ministry's proposal, the official added.
Under the 'Sustainable Technology and Environmental Promotion' component, assistance could be provided for setting up a common effluent treatment plant; and support could be extended for modernisation/capacity expansion/ technology up-gradation under the 'Integrated Development of Leather Sector' component.
Similarly, under the 'Establishment of Institutional Facilities' component, support could be provided for the setting up of new infrastructure and up-gradation of requisite infra of the existing campuses of Footwear Design and Development Institute (FDDI).
Under the 'Mega Leather Footwear and Accessories Cluster Development' sub-scheme, graded assistance is proposed for land development, social infrastructure, production facilities, and R&D (research and development) support.
For brand promotion, support could be provided to promote at least 10 Indian brands in the international market.
Further, under the component of 'Development of Design Studios', assistance could be given for developing 10 studios.
"The studios will promote design innovation, promote market and export linkages, facilitate buyer-seller meets, display designs to international buyers and work as interfaces for the trade fairs.
"These studios would provide services such as technical support, and quality control," the official added.
Earlier, the IFLADP was announced with an expenditure of Rs 2,600 crore for three financial years - 2017-18 to 2019-20. It was also aimed at the development of infrastructure and facilitate additional investments, increasing production and employment generation.
The Council for Leather Exports (CLE) has also suggested the ministry for further extension of the scheme as it helps in upgrading infrastructure, boosting domestic manufacturing and increasing the country's exports.
CLE Chairman Sanjay Leekha said the scheme was "extremely" beneficial for the sector.
"It helped the sector in registering healthy growth rates. If the government extends it, the leather industry would get a significant filip," he said.
Components like brand building and setting up of design studios are key for the sector's growth and enhancing competitiveness in both domestic and international markets, Leekha added.
He said that under the Integrated Development of Leather Sector component, norms should be easy so that the industry can avail of its benefits.
