Govt Considering Proposal to Cut Export Duty on Hides, Skins of Bovine

The government is considering a proposal to cut duty on exports of hides and skins of bovine from the current 40 per cent with a view to boost its outbound shipments, sources said. The All India Meat and Livestock Exporters Association (AIMLEA) has been demanding complete elimination of export duty as the industry is getting large number of enquiries from global markets.

A proposal in this regard was supported by the Department of Animal Husbandry and Dairying, stating that the reduction would benefit farmers who are into this business, sources said. The Commerce and Industry Ministry will have to take a view on this before sending it to the Finance Ministry. However, domestic leather product manufacturers are strongly opposing the proposal stating that raw materials should not be exported out of the country. “It should be made available to domestic manufacturers so that value added goods are exported,” a leather goods manufacturer said.

Another source said that there would be opposition to this proposal by some departments as the government is looking to boost manufacturing and exports of value-added goods from the country, not shipments of raw material. AIMLEA General Secretary Fauzan Alavi said that there is huge demand for hides and skin in the global market, and cut in export duty would provide an impetus to this industry.

“Every sector should be treated at par. We are getting good orders for meat. So what we will do with the hides and skins. Given the support from the government on the duty front, we can significantly increase the exports. India is the only country which has this duty. In times of open markets and global trade is this viable?” Alavi said.

India is one of the major countries in the world in the production of raw hides and for tanning. The other countries are China, Brazil, the US, Argentina, and Russia. In 2019 Budget, the government had slashed the duty to 40 per cent from 60 per cent. Currently, the share of raw hides and leather skin in India’s total leather and leather goods exports, which stood at USD 4.65 billion (about Rs 35,000 crore) in 2019-20, is almost negligible.

India’s export of raw hides and skins (other than fur skins) and leather stood at USD 453 million during April-January 2019-20. It was at USD 724 million in 2018-19 and USD 874 million in 2017-18. China, Germany, Hong Kong, Indonesia, Italy, Korea, Malaysia and Vietnam are the key export destinations for India.

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Source: The article is extracted from The Economic Times, June 07, 2020