India: new footwear cluster, too many taxes on leather

India: new footwear cluster, too many taxes on leather

India’s leather chain is trying to get out of the crisis. But the high number of taxes is slowing the recovery. The Indian government announced the creation of a new footwear cluster in the city of Panapakkam. This site should help the local tanning industry as well, which in the meanwhile must deal with a taxation system considered to be too heavy by operators. The concern is that the recent 7% increase in taxation will compromise exports.

New footwear cluster

The Prime Minister of Tamil Nadu, Muthuvel Karunanidhi Stalin, announced the creation of the footwear cluster. According to what reported by, the cluster will occupy a surface of 1 square kilometer in the city of Panapakkam, in the Ranipet district. The project will be financed with a 51 million USD investment and, according to local authorities, will “provide a significant push for the leather and tanning industries” of Tamil Nadu. The goal is to create 20,000 new jobs.

Too many taxes on leather

From 5% to 12%. That’s the tax increase that the Indian government announced on finished leather products. “It’s not a good decision when the country aims to triple exports”, said the president of Indian Leather Products Association, Ajay Tarway, to “Our costs – he continues – have already gone up 25% – 30% due to the inflation of imported materials. When we are recovering from the losses of Covid, this is an obstacle”.

Image from Wikimedia Commons

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