Rs 290 crore for Agra footwear development
Vishal Sharma
New Delhi/ Agra. For the ailing footwear industry of Agra, which caters for almost 55 per cent of the total domestic footwear market in India but is seriously lagging behind China in export, this could be a ray of hope.
The department of industrial policy and promotion of the Union ministry of commerce and industry has decided to provide an assistance of Rs 290 crore for the modernisation and technology upgrade in all segments of the leather sector, namely tanneries, footwear, footwear components, leather goods and garments under its newly formulated Integrated Development of Leather Sector (IDLS) scheme.
Last week, the Agra Footwear Manufacturers & Exporters Chamber (AFMEC) and the Council for Leather Exports (CLE) held discussions with officials of the Footwear Design and Development Institute (FDDI), Noida, at the Hotel Holiday Inn in Agra, on the possibilities of Agra footwear industrialists being able to utilise this helping hand of the government in modernising their footwear manufacturing units.
Talking to the footwear manufactures on this occasion, Rajeev Lakhara, managing director, FDDI, said the leather sector was booming in India and currently, the country was the second largest exporter of footwear in the world but its export share compared to China was considerably low.
He said that it had been noted that the Indian footwear industry lagged behind not due to the quality of the production, which was definitely superior than that of the Chinese manufacturers, but the real drawback was the low production rate of the footwear units in the country, primarily due to the lack of advanced machinery that was being utilised by the competing countries.
He said the IDLS programme had been specially formulated by the government to help the Indian footwear units in procuring advanced machinery and automating their production line which had now become the need of the day.
He said Rs 290 crore had been set aside by the government for the leather sector out of which, Rs. 150 crores shall be utilized for the tanneries and the rest Rs. 140 crores was for the remaining leather industry, in which, Agra footwear units were to be major beneficiaries.
He said that under the IDLS, any footwear unit that has been running in profit for the past two years and has been in existence for at least three years, will be eligible to receive an assistance of up to 30 per cent of the total cost for the small-scale units and 20 per cent of the cost for large units in their modernisation projects, with the ceiling of Rs 50 lakh, the only condition being that the project should be financially viable, a factor that shall be decided by Small Industries Development Bank of India (SIDBI).
According to Lakhara, the FDDI had been designated as the nodal agency for the disbursal of funds for the leather sector, except tanneries, for which, the Central Leather Research Institute shall be acting as the nodal agency and already, they had received 34 applications from the leather units of the country and financial assistance of Rs. 5 crore had been disbursed, while the deadline for submitting the application was March 30, 2007.
Talking to Business Standard, Puran Dawar, managing director, Dawar Footwear, said a large number of Agra units came under the eligibility criteria set under the IDLS and these exporters had so far been unable to expand their horizons, restricting the growth of the leather industry in Agra to barely 15 percent, when it could easily reach 25 percent, provided the exporters were facilitated by the government in their new ventures that were unable to get a lift off the ground owing to financial constraints despite being highly profitable.
According to Nazir Ahmed, the owner of Park Exports, a major footwear and leather goods export group of Agra said that the IDLS programme was quite attractive but it still had some flaws like the restriction on buying indigenous reconditioned machinery, when there was no restriction on importing the same reconditioned machinery from abroad, a factor that would prove a boon for the grey market for the machinery.
Also, he said, there were a lot of machines that had not been included so far in the list of machinery approved for subsidization under the programme, a factor that could prove a major roadblock in the acceptance of this programme.
The department of industrial policy and promotion of the Union ministry of commerce and industry has decided to provide an assistance of Rs 290 crore for the modernisation and technology upgrade in all segments of the leather sector, namely tanneries, footwear, footwear components, leather goods and garments under its newly formulated Integrated Development of Leather Sector (IDLS) scheme.
Last week, the Agra Footwear Manufacturers & Exporters Chamber (AFMEC) and the Council for Leather Exports (CLE) held discussions with officials of the Footwear Design and Development Institute (FDDI), Noida, at the Hotel Holiday Inn in Agra, on the possibilities of Agra footwear industrialists being able to utilise this helping hand of the government in modernising their footwear manufacturing units.
Talking to the footwear manufactures on this occasion, Rajeev Lakhara, managing director, FDDI, said the leather sector was booming in India and currently, the country was the second largest exporter of footwear in the world but its export share compared to China was considerably low.
He said that it had been noted that the Indian footwear industry lagged behind not due to the quality of the production, which was definitely superior than that of the Chinese manufacturers, but the real drawback was the low production rate of the footwear units in the country, primarily due to the lack of advanced machinery that was being utilised by the competing countries.
He said the IDLS programme had been specially formulated by the government to help the Indian footwear units in procuring advanced machinery and automating their production line which had now become the need of the day.
He said Rs 290 crore had been set aside by the government for the leather sector out of which, Rs. 150 crores shall be utilized for the tanneries and the rest Rs. 140 crores was for the remaining leather industry, in which, Agra footwear units were to be major beneficiaries.
He said that under the IDLS, any footwear unit that has been running in profit for the past two years and has been in existence for at least three years, will be eligible to receive an assistance of up to 30 per cent of the total cost for the small-scale units and 20 per cent of the cost for large units in their modernisation projects, with the ceiling of Rs 50 lakh, the only condition being that the project should be financially viable, a factor that shall be decided by Small Industries Development Bank of India (SIDBI).
According to Lakhara, the FDDI had been designated as the nodal agency for the disbursal of funds for the leather sector, except tanneries, for which, the Central Leather Research Institute shall be acting as the nodal agency and already, they had received 34 applications from the leather units of the country and financial assistance of Rs. 5 crore had been disbursed, while the deadline for submitting the application was March 30, 2007.
Talking to Business Standard, Puran Dawar, managing director, Dawar Footwear, said a large number of Agra units came under the eligibility criteria set under the IDLS and these exporters had so far been unable to expand their horizons, restricting the growth of the leather industry in Agra to barely 15 percent, when it could easily reach 25 percent, provided the exporters were facilitated by the government in their new ventures that were unable to get a lift off the ground owing to financial constraints despite being highly profitable.
According to Nazir Ahmed, the owner of Park Exports, a major footwear and leather goods export group of Agra said that the IDLS programme was quite attractive but it still had some flaws like the restriction on buying indigenous reconditioned machinery, when there was no restriction on importing the same reconditioned machinery from abroad, a factor that would prove a boon for the grey market for the machinery.
Also, he said, there were a lot of machines that had not been included so far in the list of machinery approved for subsidization under the programme, a factor that could prove a major roadblock in the acceptance of this programme.
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