Leather garment and footwear manufacturers in India have asked the government not to treat semi-finished leather as a finished product fit for export, as the move would impact on the availability of raw materials, industry sources have said.
The demand has been prompted by the request of semi-finished leather makers to the commerce ministry that they permit the export of their produce as finished leather with a view to increasing shipments.
Investment and technology upgradation is required to turn semi-finished leather into the finished product. While semi-finished leather export attracts a 60% export duty, there is no duty on the shipment of finished leather.
"Exporters of semi-finished goods also want to avoid the export duty. Treating semi-finished as finished for exports will severely affect domestic as well as export of shoes and leather products," sources said.