Leather prices in India will hike soon as the government imposes 10%+ custom duty on leather as raw material and finished products. 2020 has been a tough year as the world faced a pandemic. From basic products to already-expensive products, all encountered hikes in their price rate. In 2021, the impact of the pandemic on the economy is traceable.
According to the Cybex.in Leather import data researchers, 10% customs duty will create bigger impacts on the production of leather-based products like footwear, handbags, and belts. Not only this but due to the increment in input cost of the product, manufacturers will face a loss while exporting leather products from India to other countries. Without a doubt, a few leather importers may stepback causing leather import data to decline at a severe rate.
Following a governmental conference on Leather Import duty, it has been revealed that all kinds of finished leather, crushed leather, blue chrome tanned leather, as well as splits and sides leather will come under 10% customs duty condition. Earlier, custom duty on leather was 0%. This is why manufacturers are quite worried about facing a great loss this time. Their profit level as compared to the past few years, will decline.
Owners of top-notch shoe manufacturing companies in India have come forward. According to their thought process, 10% customs duty on leather is a move that directly links to the Atma Nirbhar Bharat Movement or Self-Reliant India Movement. Although, these manufacturers do not desire to compromise on the quality of their product. However, they publicly expressed the possibility of a decrement in quality due to high input cost.
On the one hand, where the governmental authorities are increasing custom duty on Leather from Nil to 10%, it is also contributing monetary funds in order to increase the employment rate in the given industry. This will create a lot of chaos and negotiation between leather importers and exporters. It is a possibility that 2021 leather import data will discover some new suppliers, importers, and exporters.
The reason being increased custom duty on leather will cause the manufacturer to increase the market price of their leather-based products. On the other hands, importers will find it unreasonable to import new products at a high-rate when they have the alternative to choose another exporter or supplier.
Finance officials have also concluded the government's move as beneficial for the industry. Apart from a 10% increment on leather as custom duty, 15% customs duty has also been imposed on raw silk and cotton. Yet, the governmental authorities have promised to provide the industry with a countable fund worth 1.97 crores.
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