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India’s discrepancies: they support footwear, yet they raise taxes on raw hides

On the one hand, they are supporting industry. On the other hand, they have been completely shutting down a few clusters. In India, leather industry professionals live and work in a complicated and rather contradictory context.

Fostering footwear

India’s government announced they are going to support footwear industry by creating some corporate Social Responsibility funds (CSR). The aim of the project is to “provide community with a better work environment while establishing – as reported by entrepreneur.com blog – that footwear companies will be supposed to invest, in such area, 2% of their yearly profits”.

Aiming at 9 billion dollars

Mahendra Nath Pandey, minister for Skill Development and Entrepreneurship (MSDE), made clear, during a social event held in Chennai, that all domestic leather industry is driven by exports. With specific regard to footwear, its potential turns out to be outstandingly relevant: according to the minister, 2 million people may find a job in the industry in the next 5 years. Quite a “mob” indeed, not to mention 2.5 million employees formerly hired and currently working in the field. India’s footwear business accounts for 2% of gross domestic product: its annual revenues roughly amount to 5.85 billion dollars. Considering its potential growth, predicted by the minister for Skill Development and Entrepreneurship, it may well aim at a 9-billion-dollar turnover.

Slaughterhouses are in trouble though

Yet, among other actions set by Indian government, they also decided to raise taxes on raw hides and skins. For the records, such measure has been deeply affecting tanneries at once. Consequently, it caused slaughterhouses to reduce their activity rather abruptly. In particular, the ones situated in the area of Qureshi Mohalla. Here, as reported by Time of India, several entrepreneurs were even compelled to take hides to the dump because they could not find any buyers. Moreover, owing to tax rise, also imposed on chemicals, domestic demand for raw hides and skins (sheep and goat, most of all) has collapsed: exports, which have increased by 7%, could offset it just a very little.

 

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