Mr P. Chidambaram, Indian Minister of Finance, has proposed lowering the percentage of excise duty on leather. Speaking at the presentation of the Union Budget 2006-2007 at the end of February he said, "Since leather and footwear are thrust sectors, I propose reducing excise duty on footwear with a retail sale price between Rs250 ($5.64) and Rs750 ($16.96) from 16% to 8%."

He commented that the leather industry is an important sector for providing job opportunities and added, "The two sectors have the potential to create a large number of jobs in manufacturing and services. In manufacturing, we have identified some industries which, with appropriate incentives, can throw up huge job opportunities. These include textiles, food processing, petroleum, chemicals, petrochemicals, leather and automobiles.”

Meanwhile, according to the Indian Economic Survey 2005-06, released last week, leather and leather & fur products reported a fall in output of 1.6% in the period April-December 2005, compared with growth of 4.1% in the corresponding period in 2004.