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TN govt inks pact for Rs 2,250 crore investment in leather sector, launches state footwear policy, Retail News, ET Retail

TN govt inks pact for Rs 2,250 crore investment in leather sector, launches state footwear policy

Chennai: The Tamil Nadu government signed five memoranda of understanding (MoUs) for an investment worth Rs 2,250 crore in the footwear and leather sector, on Tuesday in the presence of Chief Minister M K Stalin who unveiled the ‘Tamil Nadu Footwear and Leather Products Policy 2022′. The policy is aimed at attracting Rs 20,000 crore investment in the leather sector by 2025 and in creating employment opportunities to 2 lakh people. It would transform Tamil Nadu into the most favoured destination for manufacturing of footwear and leather products in Asia, he said and appealed to the industries to popularise ‘Make In Tamil Nadu’ products in a global arena.

“In order to achieve the USD 1 trillion economy by 2030, Tamil Nadu should attract capital intensive high-tech industries and employment intensive industries,” he said while speaking at the Tamil Nadu Footwear and Leather Sector Conclave 2022 here.

KICL SEMS, Wagon International, KICL, Walkaroo and KICL (footwear cluster) are the five firms with which the state government signed the MoUs. These would generate jobs to 37,450 people.

Also, the Chief Minister laid the foundation stone for a Rs 400 crore mega footwear manufacturing park at Panapakkam, Ranipet, on the occasion.

Several global fashion brands have a connection to Tamil Nadu. Footwear of well-known luxury brands such as Louis Vuitton, Giorgio Armani, Gucci, Clarks, Cole Haan, Daniel Hechter, Bugatti, Prada, Zara, Coach, Tommy Hilfiger, Hush Puppies, Ecco, Johnston & Murphy, Hugo Boss, Pierre Cardin, and Florsheim, are either manufactured in Tamil Nadu or the raw materials are sourced from the state.

The state is the second largest economy in India, a leader in the traditional leather sector, and is championing the growth in footwear, it said.

“The state has a well established industrial ecosystem of high-performing sectors such as electronics, textiles, information technology, auto-mobiles and auto-components,” the policy document said.

Besides, the state offers a host of advantages in terms of human capital, knowledge and research, infrastructure, diversified economy, and favourable investment climate, it said.

The policy will increase the productivity of existing players and make Tamil Nadu the most favoured destination for footwear exporters.

Tamil Nadu has emerged as a natural leader in the footwear segment, contributing 26 per cent to the national manufacturing output and 48 per cent of the national exports. The existing footwear manufacturing clusters in Tamil Nadu can be leveraged to address the growing domestic demand and export requirements for footwear, the policy stated.

Apart from creating a conducive ecosystem and resilient supply chain for footwear manufacturing by supporting infrastructure in terms of clusters, parks and common facilities, the policy would enhance the non-leather footwear and component ecosystem by supporting the ancillary units besides encouraging exports.

Industries allied to footwear manufacturing or component industries located outside the clusters are eligible for a Fixed Capital Subsidy (FCS) of 10 per cent of investment in eligible fixed assets to be disbursed in 10 equal annual instalments.

The company can choose to avail FCS from the date of commercial production or upon achieving the minimum eligible investment threshold of Rs 150 crore and minimum employment threshold of 100 jobs, whichever is later, it said.

“The state accounts for a fairly large number of footwear and leather manufacturing units in India. Leather goods made in Tamil Nadu have great demand in the international market,” the Chief Minister said while presiding over the event.

Ambur, Ranipet, Vaniyambadi, Vellore, Peranampattu, Tiruchirappalli, Dindigul, Erode and Chennai are among the major centres for leather and leather goods production.

He said Tamil Nadu is the only state in the country to implement Zero Liquid Discharge in tanneries.

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