Indian leather trade mobiles against duty drawback cuts
Following on from the government’s halving of export duty drawbacks at the beginning of June, (see leatherbiz.com story 11.06.01) the Indian leather industry led by Shri Irshad Mirza, Chairman of the Council for Leather Exports (CLE) has called on Shri Murasoli Maran, Union Minister of Commerce & Industry, to look again at the situation.
A statement issued by the CLE last week reads as follows:
"A delegation comprising the Chairman, Vice Chairman, all Regional Chairmen, all product panel chairmen and other leading exporters from across the country made a forceful appeal to the Minister that the new rates should be deferred or at least kept in abeyance.
The delegation impressed upon the Minister that there was absolutely no rationale and reasoning in drastically reducing the drawback ad-valorem rates and ceilings on eligibility.
The objective of the drawback scheme is to compensate the actual duties suffered on various inputs for the export products. The new rates notified are totally defeating the objective. If new drawback rates are brought into force, then there will be a serious set back to the government strategy itself for producing and exporting value-added leather products and also entering the major international markets with high-end quality products.
The exporters expressed their anguish that there was no transparency in deciding the drawback rates, particularly when such a drastic revision was contemplated. This is despite the fact that the CLE had given voluminous data justifying upward revision of last years drawback rates.
The delegation brought to the notice of the Minister that the leather export sector started making a recovery from the serious recession experienced by the industry during 1995-2000. Only during 2000-2001, the sector could make export worth of about Rs.10,000 crore. The exporters say they have already committed themselves to international export orders to the tune of Rs.4000-5000 crore for the next about five months on the basis of the old drawback rates. Thus, the new drawback rates if brought into force, would result in a heavy monetary loss to the exporters besides seriously hurting the export momentum that has so recently picked up. "
(Statement ends)
Shri Maran reportedly noted the suggestions made by the delegation and assured them that he will take up the matter with the Finance Minister at the first opportunity.
