India's leather sector needs development and investment to reach target exports of US$7bn by 2010-11, according to Commerce and Industry Minister Shri Kamal Nath.

Presently, export earnings from leather are in the region of $2.7bn, with a growth rate of about 8%.

Addressing delegates at the India Leather Summit 2006, Nath said that in order to raise leather exports to the projected level, annual export growth rate at an average of 20% must be sustained and additional capacities must be created with state-of-the-art production technologies.

Indicating that Indian leather products would get greater market access under the World Trade Organization (WTO) regime, Nath said: "Indian leather products will not only get greater market access in developed / industrialised countries in view of tariff elimination and reduction mechanisms through Free Trade Agreements (FTAs), Regional Trade Agreements (RTAs) and Preferential Trade Agreements (PTAs), but the cost competitiveness of the domestic manufacturers will improve further in view of gradual phasing out of import duties in India on inputs and machinery."

While several policy measures have been taken to encourage large domestic and global investments into the leather industry, Nath expressed concern that there have been hardly any investments in this sector.

"So far, the industry has attracted overseas investments at very abysmal level of less than 0.15% of total foreign investments inflow into the country.

"This trend needs to be reversed through aggressive campaigns, investment promotion programmes and by creating awareness about investment opportunities available in the Indian Leather Sector."

Underlining the huge opportunities from India, Nath pointed out that most manufacturers of leather and leather products from industrialised countries of the West were looking for shifting their production base to Eastern countries especially India, owing to rising labour costs even in China.