Chennai, Nov 24 : The Tamil Nadu Leather Tanners Exporters and Importers Association (Talteia), representing mostly the small tanners and manufacturers of EI (East India) tanned leather, is asking for abolition of duty on export of leather. After the October 17 notification of the finance ministry, different types of leathers attract export duty ranging from 15 per cent to 60 per cent.
"Imposition of duty results in loss of business to the small tanners and loss of foreign exchange to the country. Due to heavy losses, 50-60 per cent of the over 700 small tanners have left the business.
Those remaining are in absolute misery," president N Abdul Rahim and secretary MS Vadivelu, respectively of the association told newsmen in Chennai on Friday.
Indian product manufacturers do not need large quantity of EI leather and there is very limited demand for them in India. They said the duty-free export of the vegetable tanned, environment friendly EI leather was inevitable for the survival of the small tanners in Tamil Nadu.
Since duty-free leathers are available in other neighbouring countries, India is losing over Rs 2000 crore in export earnings as importers shun duty-laden Indian leather.
Indian leather products exports are driven by European fashion trends. Owing to the non-availability of EI leather to the fashion designers of Italy and Germany, they do not make products based on it. Hence there is hardly any demand for EI leather-based products which would have been an exclusive product of India. (In the world only Tamil Nadu tanners make the vegetable-tanned EI leather).
"An exclusive market could be developed for EI leather and leather-based products in spite of the compulsions of WTO and both the leather industry and small tanners would have benefitted if its free exports were permitted," they said.
The Commerce ministry had been in favour of duty-free export EI leather.And in January 2000 it was announced as an item of free export."But it was the pressure from the product industry `for baseless reasons' that has forced the finance ministry to impose duty on exports while there is absolutely no duty on imports of any type of leather," the Talteia officials said.
They denied the charges that large quantity of EI leather was being exported from Mumbai port as finished leather evading duty. Mumbai is a preferred port for exports to European countries, they said and added that the freight rates are low, voyage time is only two weeks and customs procedure is much simpler there than in Chennai.
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