On the line of textile parks, Union Commerce Ministry proposes to set up integrated leather parks (ILPs) across the country for increasing the production capacities in the leather sector to meet the supply chain for growing leather export.
“To start with we propose to set up five leather parks one each at Chennai,  Kolkata, Agra, Kanpur and Tada (in Andhra Pradesh),” Minister of State for Commerce Jairam Ramesh told reporters here on Friday.
“We have written to Finance Minister P Chidambaram to allocate Rs 500 crore for setting up leather parks over the next five years. The response from the Finance Ministry is positive,” he said.

Vision Document
In coming year, the leather export industry will require high-quality leather to meet growing demand from international market, Mr Ramesh said adding the Vision Document prepared by the Leather Export Promotion Council (LEPC) has set a target to enhance export from the level of $3.3 billion in 2006-07 to $7 billion by 2011. Based on projection made by the Vision Document, the ministry proposes to increase the capacity of leather sector by a mix model where in both foreign direct investment and domestic investment could be harnessed effectively, he said.
“While the Special Economic Zone (SEZ) will address the need to create large capacities, especially through foreign investments and joint ventures, establishment of ILPs will support the immediate need of capacity augmentation of leather sector to achieve desired production levels,” he added.
 The leather industry has proposed setting up of at least 15 ILPs throughout the country during the Eleventh Plan (2007-2012). It is estimated that each ILP with a minimum area of 25 acres and maximum of 100 acres could cost around Rs 15O crore and Rs 200 crore.
The industry has suggested that the Centre adopt the same approach of financial assistance for setting up ILPs as is being extended to textile parks, Mr Ramesh said adding details would be worked out once the proposals are cleared.
As per the industry’s projection with the creation of additional production facilities through setting up of ILPs it is expected that leather industry would create additional jobs of 500,000 in the next 4-5 years.
The proposed ILPs would provide basic infrastructural support like tanneries and design laboratories for entrepreneurs to set up plants for manufacturing wide range of leather products.
Mr Ramesh said capacity in tanning and product sector have not increased commensurate with demand for the Indian products abroad for variety of reasons. “The proposed ILPs would fill up this vital gap,” he said.
He said the government would encourage leather exporters to give more focus on the US market, pointing out that currently US accounts for just 12 per cent of India’s total leather export sector. We have asked exporters to focus on US, he added. “The exporters have been asked to adopt two-pronged strategy to boost leather export to US. They will have to increase volume of leather export and diversify into women’s and children’s footwear,” he said.