Tamil Nadu (TN) Chief Minister (CM) M.K. Stalin launched the Footwear & Leather Products Policy 2022 of TN at the Tamil Nadu Footwear and Leather Sector Conclave 2022 with the aim of making the state a preferred destination for the manufacturing of footwear and leather goods in Asia.
- The conclave was organized by Guidance Tamil Nadu, a TN government investment promotion agency.
The policy will include a special package for the manufacture of Footwear and Leather Products (FLP) as well as incentives for FLP Design Studios.
Note: Guest at the event – Jonathan Ram, CEO, C&J Clark International Limited, a British international shoe manufacturer and retailer.
Potential of TN in the Footwear and Leather Sector: A Global Footwear Brands Hub
i. TN is a national and global footwear industry leader, which accounts for 48% of India’s exports and 26% of the country’s footwear production. TN is the second largest economy in India.
ii.TN’s significant centres for the production of leather and leather items include: Ambur, Ranipet, Vaniyambadi, Vellore, Peranampattu, Tiruchirappalli, Dindigul, Erode, and Chennai.
- TN is the only state in India that has implemented Zero Liquid Discharge in tanneries.
iii. The state either manufactures international brands or provides a sourcing location for raw materials.
- The International brands include: 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.
TN Government Signed MoUs Worth Rs. 2,250 Crore with 5 Companies in The Footwear & Leather Sector
The TN government signed Memorandums of Understanding (MOUs) with five companies for a total investment of Rs. 2,250 crore, with the goal of creating 37,450 jobs.
- The 5 companies are: Kothari Industrial Corporation Limited (KICL), KICL SEMS Group, KICL (footwear cluster), Wagon India Private Limited, and Walkaroo International Private Limited.
During the conclave, the CM laid the foundation stone for a Rs. 400-crore Mega Footwear Manufacturing Park in Panapakkam, Ranipet district, Tamil Nadu
- TamilNadu Government plan to make Rs 20,000 crore attracting investment in the production of leather goods and footwear by 2025 and it will create 2lakshs jobs to the sector.
i. The KICL and Phoenix Accord Limited inked two agreements: one for non-leather footwear manufacturing at a cost of Rs. 1,200 crore, generating 20,000 employment; and the other for a footwear cluster (a plug-and-play infrastructure) worth Rs. 500 crore, creating over 5,000 jobs.
ii.The Kothari-SEMS Group signed a Rs. 300-crore pact creating 10,000 jobs.
iii. Wagon India Private Limited has committed to a Rs. 150 crore investment generating employment for 1,200 people.
iv.Walkaroo International Private Limited will invest Rs. 100 crore creating jobs for 1,250 people.
- The TN government has inked 192 MoUs totaling Rs. 2,20,220 crore in investment and nearly 3 lakh job opportunities in the past 12 months.
- It has already launched a number of initiatives for several sectors, including industrial, Micro, Small & Medium Enterprises (MSME), start-up, and innovation.
TN’s Footwear & Leather Products Policy 2022
The objective of the policy is to promote infrastructure through clusters, parks, and shared spaces in order to create a favourable environment and a robust supply chain for the manufacture of footwear.
- These will strengthen the non-leather footwear and component ecosystem by supporting ancillary units and improving ease of doing business for FLP units.
i. The “Special Package for FLP Manufacturing” will simplify the eligibility criteria for enterprises applying for incentives due to the labor-intensive nature of FLP manufacturing.
- The eligibility criteria for leather FLP and standalone non-leather footwear include a minimum investment of Rs. 50 crore and a minimum of 2,000 jobs.
- Investments made from April 1, 2022, will be eligible for incentives.
ii.According to the Tamil Nadu Industrial Policy (TNIP) 2021, “Large” FLP manufacturing projects in “B” and “C” category districts (Rs. 300 crore+) will be eligible for Special Packages, while “Mega” projects in “A” category districts (Rs. 500 crore+) will be eligible for a “Structured Package of Assistance.”
iii. A Turnover-Based Subsidy will be available as a percentage of turnover in each financial year due to the higher turnover to asset ratio in FLP manufacturing.
iv.A Fixed Capital Subsidy (FCS)of 10% of investment in eligible fixed assets will be available to sectors related to the manufacturing of footwear or component industries outside the clusters. This subsidy will be distributed in 10 equal annual instalments.
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