Increase of imports of footwear and finished leather goods from China have caused Indian leather businesses to worry.
The industry representatives have demanded the Government to impose higher import tax on these items to boost exports.
India is a net exporter of leather hides to China but these hides are manufactured into finished products and exported back to India. The trade imbalance between India’s exports and China’s imports has led the businessmen to take necessary steps.
Chinese exports make up 68 percent of India’s footwear imports and 91 percent of imported leather goods were value-added finished products.
“We have raised our issues and the ministry is reviewing it,” said a leather industry representative following a meeting with the Department of Commerce. “We have asked the import duty on Chinese footwear to be increased from 25 per cent to 35 per cent because of a negative trade balance on footwear.”
In another suggestion, China decreasing its taxes on imports of finished leather skins from India was also put down. It may be noted here that India does not charge import duty on the same.
Import duty in China currently stands at 5-7 per cent for bovine finished leather, 5.6 percent for sheep or lamb finished leather, and 9.8 percent on goat finished leather under the Asia-Pacific Trade Agreement which India is part of.
The government has recently been promoting Indian leather internationally to try and increase exports in partnership with the Council of Leather Export.
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