The leather sector, which is the second largest export-oriented sector of the economy, has called for help from the government.
The exports can grow by almost five times if incentives similar to textile sector are also given to leather sector, the stakeholders claim.
The Federal Minister of Commerce, Amin Faheem in his speech on Trade Policy 2009-10 stated that a comprehensive leather and leather products export plan in consultation with major players of this sector would be announced.
Chairman, Pakistan Tanners Association (PTA) Agha Saiddain talking to Daily Times Monday said, “This is high time to announce leather policy as this export-oriented sector is the second foreign exchange earner after textile”. Agha said the government should immediately announce leather policy to control further decline in exports. He said leather exports recorded decline of 29.44 percent during the year 2009-10 which was alarming. He said leather strategy report created after consultation with all the stakeholders of leather sector under the supervision of J E Austin is already submitted to the Federal Ministry of Industries.
He said India, China and Bangladesh saved their leather sector from global recession by allowing special incentives to the leather sector in the name of Special Relief Package. India allocated Rs 1312 crore for rehabilitation of their leather sector under 10th and 11th leather plan, he added.
He said the Minister of Commerce should coordinate with the Ministry of Industries and stakeholders and announce incentives for next five years as announced by the textile ministry. He said refinance at lower rate of 5 percent, exemption of load shedding, duty free import of tanning and footwear machinery, financial grant for small units, 50 percent financial assistance to bear the interest cost on imported machinery and financial assistance for setting up treatment plants in individual tanneries might be announced without any further waste of time.
The leather sector has a potential to take their exports to $5 billion from present $943.788 million, which was $1.25 billion during 2007-08. He said that leather sector was more deserving of incentives allowed to textile sector being labour intensive and industry providing employment to half a million families. He said the government should take burden of Social Security and EOBI of ladies workers working in leather garment factories and footwear units.
He said benefits of leather and leather products making trickle down from top to farmer and Pakistan has a golden opportunity to use raw skins of Central Asian States, Middle East and Africa where tanning industry was not so advanced. At present this benefit goes to China and India.
He said government should give priority to human resources development of leather industry and infrastructure facilities might be developed in the country. He stated all exports from Pakistan should be made zero rated in real sense. All taxes levied on oil, gas, electricity, and other inputs should be paid back to the exporters to compete with other countries having similar policies.
He said the government might allow special incentives to the leather industry keeping in view incentives allowed in India, China and Bangladesh where these incentives are 7.5 percent to 15 percent. He urged the government to call major players of leather sector to form a leather policy and implement the same with retrospective effect from July 11, 2009. He appreciated the effort of Federal Minister for Textile Industry, Rana Farooq Saeed Khan and his team for his revolutionary announcement of Textile Policy 2009-14. He said it is now upto textile sector to reap the benefits of the policy and take their exports to the $25 billion target set by the ministry.
