The Integrated Development of Leather Scheme (IDLS) came into effect in December 2017 by the Department of Industrial Policy and Promotion (DIPP), with a vision to empower and transform the Indian leather industry. It is aimed at upgrading existing manufacturing facilities, converting traditional buffalo leather tanneries into state-of-the-art environment-friendly tanneries, and encouraging entrepreneurs to set up new units in integrated clusters and diversify in new areas as specified under the IDLS.
The leather industry has the potential to grow manifolds if it is given the much-needed push from the Government. The Integrated Development of Leather Scheme (IDLS) therefore, should be supported not only by the State Government but also by everyone interested in the leather trade. As we all know, the leather industry occupies a large part of the country’s export earnings and contributes substantially to our GDP. It provides livelihood to 4 million people and comprises 1% of India’s GDP.
Objective of the Scheme
Objectives of Integrated Development of Leather Sector sub-scheme. Providing for sustainable industrial growth and employment in the organized leather units and integrating all the stakeholders in an online, transparent framework by opting for a paperless system through an online portal that has the facility for the active interface of PIU (Project Implementation Unit). The scheme is meant for the integrated development of all the tanneries, processing units, and craftsmen associated with the leather industry at a competitive level to make them internationally competitive. The Integrated Development of Leather Sector (IDLS) sub-scheme is meant for development and implementation in a planned manner by uniting the efforts of the industry, government, exchequer, and other stakeholders. IDLS comes with a vision to increase focus on working tanneries for achieving levels in duly crafts-based value additions & brand positioning. This can be achieved by making India a preferred manufacturing hub for making boots/shoes, leather products, leather garments, customized leather jackets/coats, etc., from all over the world besides exporting the same to different international markets. The Scheme provides four major Sectors of Government support viz Offer of Credit Linked Subsidy (OCLS), linkage with International Financial Institutions, Skill Development, and Customs duty exemption when importing machinery and raw material needed for setting up new tanneries.
Eligibility for the Scheme
- All existing units in the Footwear, Leather and other accessories including tanneries, saddlery, leather goods, leather footwear, footwear component sector, and non-leather footwear can apply.
- The units should not have incurred losses and persistent cash profit for two years (as certified by the bank or full-time practicing Chartered Accountant or any other document as prescribed by the Steering Committee). They must also have undertaken successful and bankable programs on technology up-grading after January 1, 2016.
- If met certain criteria, the scheme also is open to new units. As long as the project is evaluated and appraised, and found to be bankable and viable by the bank providing GOI assistance, new units seeking assistance under the Integrated Development of Leather scheme will be considered.
- If the units are capable of financing themselves, then the viability of the project will be determined based on the working capital of those units.
Project Cost
- The government has increased the amount of investment assistance to Rs.3 crores and 30% of the total investment is earmarked for Small and Medium Enterprises (SMEs).
- The release of actual funds in the form of assistance would be made to MSME units through CLRI and FDDI for their respective requirements.
- The amount of assistance varies with the type of business and its size. The maximum amount of assistance will be 30% of the cost of plant and machinery (CPM).
- This will be for small & medium enterprises and also for micro industries.
- The maximum amount of assistance will be 20% of CPM towards plant and machinery (PM). Assistance is given under this scheme for upgrading technology to enable new units to compete globally by adopting modern technologies.
The cost will cover the following:
- Value of machinery
- GST, Sales and Excise Tax
- Transit insurance and transportation cost
- Import duty
Subsidy Release
The monetary assistance for eligible units will be arranged through scheduled banks. The CLRI and FDDI would receive a maximum fee of 1% of the total GOI Assistance under the scheme, based on an appraisal by the Steering Committee. Banks will also be eligible for fees for services rendered by them, capped at 0.5% of the total GOI Assistance that has been released to approved units.
After the acceptance of the appraisal and proposal, the scheduled bank will execute an agreement on behalf of the Government of India with the industrial unit to be assisted. The agreement must be signed before the financial assistance is disbursed. The financial assistance will be disbursed only after the machines arrive at their destinations and after the execution of this agreement.
How to Apply
- Visit the National Single Window System
- Create your account and Login
- Click on https://www.nsws.gov.in/
- Under the “All schemes” section, select “Indian Footwear and Leather Development Programme”
- Amongst all the options, select the applicable sub-scheme and apply
Integrated Development of Leather Sector sub-scheme Details
Collateral Security: As per Norms
Processing Fees: As per Norms
Scheme Validation: 2017-18 to 2020-21 – Not Active