Government Schemes and Policies for the Leather Sector
The leather and footwear industry occupies a central position in India’s manufacturing sector, contributing substantially to export earnings, industrial output, and employment generation. Operating under the administrative purview of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, the sector employs over 4.4 million people, with a high participation rate of women workers. To enhance global competitiveness, address environmental sustainability, modernize infrastructure, and promote domestic manufacturing, the Central Government executes targeted financial, technical, and infrastructure development policies across the entire value chain.
Indian Footwear and Leather Development Programme (IFLDP)
The Indian Footwear and Leather Development Programme (IFLDP) serves as the core central sector scheme dedicated to the holistic growth of the leather ecosystem. Approved with a financial outlay of ₹1,700 crore for implementation during the 2021–26 period, IFLDP consolidates several specialized sub-schemes to modernize production units, support tannery environmental compliance, and build technological capacity.
Sustainable Technology and Environmental Promotion (STEP)
- Provides financial assistance to tanneries for setting up, upgrading, and modernizing Common Effluent Treatment Plants (CETPs).
- Supports the adoption of Zero Liquid Discharge (ZLD) technologies, hazardous waste management facilities, and sludge management systems.
- Grants financial aid up to 70% of the project cost for CETPs, helping units comply with environmental standards set by the Central Pollution Control Board (CPCB).
Integrated Development of Leather Sector (IDLS)
- Focuses on modernizing and expanding capacity across existing manufacturing units in the leather, footwear, and leather products segments.
- Grants financial assistance for technology up-gradation at the rate of 30% of the cost of plant and machinery for Micro, Small, and Medium Enterprises (MSMEs).
- Provides financial assistance at the rate of 20% of the cost of plant and machinery for non-MSME manufacturing entities.
Mega Leather Footwear and Accessories Cluster Development (MLFACD)
- Funds core infrastructure creation to establish world-class manufacturing hubs, raw material banks, and testing laboratories.
- Provides financial assistance at 50% of the project cost, subject to specified upper limits based on cluster land area.
- Encourages spatial concentration of manufacturing units to lower logistical overheads and aggregate supply chain benefits.
Brand Promotion and Design Development
- Supports domestic leather and footwear manufacturers in developing novel designs and marketing their brands in international markets.
- Extends financial support up to 50% of total expenses for participating in trade fairs, international exhibitions, and buyer-seller meets.
- Establishes specialized Design Studios in collaboration with national training institutes to drive product innovation.
Infrastructure and Specialized Support Sub-Schemes
Establishment of Institutional Facilities
- Finances the setup and infrastructure enhancement of campuses under the Footwear Design and Development Institute (FDDI).
- Supports research and development initiatives, testing laboratories, and center-of-excellence facilities across major leather clusters.
Promotion of Indian Brands in Footwear and Leather Sector
- Encourages domestic companies to acquire international brands or build indigenous footwear brands for export markets.
- Provides financial grants for international marketing, product positioning, and overseas retail expansion.
| Sub-Scheme Under IFLDP | Primary Operational Focus | Financial Assistance Pattern |
| STEP | CETP setup, ZLD adoption, pollution control | Up to 70% of total project cost |
| IDLS | Technology up-gradation and unit modernization | 30% for MSMEs; 20% for Non-MSMEs |
| MLFACD | Infrastructure and industrial cluster creation | 50% of total project cost |
| Brand Promotion | Overseas brand building and design studios | Up to 50% of trade and design expenses |
Specialized Institutions and Regulatory Oversight
Council for Leather Exports (CLE)
The Council for Leather Exports operates as an autonomous export promotion organization under the administrative control of the Ministry of Commerce and Industry. Headquartered in Chennai, CLE assists exporters with trade statistics, represents the industry in international trade delegations, and coordinates market access initiatives.
Footwear Design and Development Institute (FDDI)
Established under the Footwear Design and Development Institute Act, 2017, FDDI is recognized as an Institute of National Importance (INI). Operating 12 campuses nationwide, FDDI delivers specialized higher education, technical training, quality testing, and research services in footwear, leather goods, and fashion merchandising.
Central Leather Research Institute (CLRI)
Functioning under the Council of Scientific and Industrial Research (CSIR), CSIR-CLRI in Chennai serves as the premier scientific research establishment dedicated to leather technology. It develops eco-friendly tanning chemicals, water conservation methods, bio-processing techniques, and waste-to-wealth technologies for industrial application.
Trade Policy and Import Tariff Adjustments
Quality Control Orders (QCOs) for Footwear
- The Central Government issued mandatory Quality Control Orders (QCOs) covering various categories of footwear under the Bureau of Indian Standards (BIS) Act, 2016.
- Mandates that all domestic manufacturers and foreign exporters to India obtain BIS certification before selling footwear in the Indian market.
- Prevents the dumping of low-quality synthetic footwear, safeguarding domestic consumers and manufacturers.
Export-Import Duties and Customs Policies
- The policy regime grants duty-free import of specified critical raw materials, linings, finishes, and embellishments under the Export Promotion Schemes to boost export competitiveness.
- Imposes export duties on raw hides, skins, and semi-finished leather (wet blue) to retain raw material within the country and encourage high-value finished product exports.
Key Facts for Quick Revision
- The Indian Footwear and Leather Development Programme (IFLDP) is implemented by DPIIT under the Ministry of Commerce and Industry.
- CSIR-Central Leather Research Institute (CLRI) is located in Chennai, Tamil Nadu, which serves as India’s premier leather research hub.
- The Footwear Design and Development Institute (FDDI) was granted the status of an Institute of National Importance under the FDDI Act, 2017.
- Tamil Nadu accounts for the largest share of leather production and export output in India, followed by Uttar Pradesh (Kanpur and Agra clusters) and West Bengal.
- The STEP sub-scheme under IFLDP offers up to 70% financial assistance for Common Effluent Treatment Plants (CETPs) to achieve Zero Liquid Discharge.
- Mandatory BIS Quality Control Orders (QCOs) apply to protective, safety, and general footwear sold in the domestic market.
- Council for Leather Exports (CLE) acts as the official export promotion council for the leather industry, headquartered in Chennai.
- India stands as the second-largest producer and consumer of footwear in the world, trailing only China.
