NEW DELHI: Industry has raised alarm bells as imports of finished leather goods and footwear from China have increased amid falling exports of these products from India.
Even though India is a net exporter of raw hides and skins to China, it is a net importer of footwear and other articles of leather such as handbags, saddlery and harnesses from its neighbour.
Footwear is a major import item from China into India, accounting for about 68% of total footwear import into the country. Value-added products such as leather products and footwear constituted 91% of imports of leather, leather products and footwear from China, as per industry estimates.
“As far as leather and footwear sector is concerned, balance of trade now is in favour of China,” said an official in the know of the issue which was recently discussed at a meeting of the department of commerce and various industry bodies on containing the trade deficit with China which was down by $10 billion to $53 billion in 2018-19.
In the April-January period of 2018-19, India’s import of footwear from China was $353.33 million and that of leather articles was $321.6 million. However, India’s export of these products to China was $34.1million and $21.3 million, respectively, even though the skins and hides to produce leather goods such as saddlery and handbags are exported mostly from India. “We have raised our issues and the ministry is reviewing it. We have asked the import duty on Chinese footwear to be increased from 25% to 35% because of a negative trade balance on footwear,” said a leather industry representative who was present at the meeting.
China imposes 5-7% import duty on bovine finished leather, 5.6% duty on sheep or lamb finished leather, and 9.8% tariff on goat finished leather under the Asia-Pacific Trade Agreement, of which India is also a member. “This may be brought down to zero, as there is no import duty for finished leather in India,” the industry representative said.
China is the fifth largest importer of leather and leather products in the world. The import of leather and leather products of China has increased from $7.7 billion in 2013 to $8.8 billion in 2017, growing at a CAGR of 3.39%.
Commerce and industry minister Suresh Prabhu has said that India should not only have a balance in trade with China, but a trade surplus going ahead.
Source: economictimes.indiatimes.com