Maran for 100 p.c. FDI in leather sector

By Our Special Correspondent

CHENNAI, JAN. 31. The Commerce and Industry Ministries are `working jointly' to bring about dereservation of the leather sector and permission for 100 per cent foreign direct investment (FDI) in the sector, the Commerce Minister, Mr Murasoli Maran, said here today.

``Dereservation (viz, permission for medium and large industries to enter manufacturing without any export obligation) is a must'' for the leather sector to achieve economies of scale and quality, Mr. Maran said.

Inaugurating the 16th India International Leather Fair (IILF 2001) at the new Chennai Trade Fair Complex, Mr. Maran said the leather industry, besides contributing to exports, was ushering in a `social revolution' inasmuch as it employed mainly ``Harijans, women and the minorities.''

The Minister said assistance of Rs 4 crores had already been granted under the Tannery Modernisation Fund launched in January 2000. Recently, the scheme for providing soft loans under the Italian Line of Credit had been dovetailed with the tannery modernisation scheme.

``The National Leather Development Programme is also doing pioneering work in demonstrating the benefits of modernisation schemes,'' he said, appealing to the industry to avail itself of the schemes and create a niche for its products in the ``fiercely competitive export market.''

The Minister, while complimenting the leather industry for its recovery and surge on the export front, said it had, however, only ``touched the periphery of the vast US market, which picks up 30 per cent of world exports.''

Expressing happiness over the fact that the annual IILF had now got a permanent venue - the Chennai Trade Centre inaugurated at the function by the Chief Minister of Tamil Nadu, Mr. M. Karunanidhi - he expressed the hope that the India Trade Promotion Organisation (ITPO) would formulate an action plan for year-round use of the infrastructure.

Mr T. R. Baalu, Union Minister of Environment and Forests, said the setting up of common effluent treatment plants (CETPs) covering 576 tanneries, with 25 per cent subsidy each from the Centre and the State government, was an example of `synergistic' functioning of the Centre and the States.

Referring to the tanning industry's demand for assistance from his Ministry for solving the problem of TDS (total dissolved solids, whose presence exceeds prescribed maximum even in treated effluent), he said the Government would not `compromise' on the issue of protecting the environment.

In the Dindigul tannery cluster in Tamil Nadu, even the water used as input by tanneries had very high levels of TDS, and hence there was no question of TDS reduction to prescribed levels in the post-processing stages. He had, therefore, taken up with the Chief Minister the possibility of finding alternative sources for water for the tanneries.

Mr M. M. Hashim, chairman, Council for Leather Exports (CLE), announced a donation of Rs 85 lakhs by several leather industry firms in Tamil Nadu for earthquake relief in Gujarat.

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