One of the most potential export-oriented industries in the country is the leather and leather products sector, but it is currently having difficulties as a result of the government reducing and eliminating incentives for finished leather and removing incentives for crust leather.
According to BTA insiders who spoke with local media, the Bangladesh Tanners Association (BTA) discussed with the finance ministry to correct the issue and restore the incentive program for the industry’s continued growth.
The government used to provide a 10 per cent incentive on crust leather. It has been withdrawn through a circular of the Bangladesh Bank. Meanwhile, finished leather is now getting 7 per cent incentive, a decline from the previous 10 per cent.
However, among the 43 incentivised products, other sectors continue to receive incentives.
Industry experts say that these benefits ought to last until Bangladesh leaves the LDC category in 2026. The country’s leather export capacity should be increased by obtaining compliance and Leather Working Group (LWG) certification before this deadline.
The Leather Sector Business Promotion Council (BPC), the Ministry of Commerce, and other organisations are supporting the BTA in its implementation of workshops, compliance training, and best practice advice for tanneries.
As per the BTA, approximately two lakh persons earn a living by working both directly and indirectly in different sectors of the industry. Additionally, the forward and backward linkages industry employs around 10 lakh people.
By 2030, the leather industry will create employment opportunities for 35 lakh to 40 lakh people and has the potential to produce and export leather goods and footwear worth US $ 12.50 billion.
Savar Tannery Industrial Estate was developed at a cost of Tk 1,015 crores in an attempt to boost export revenue, but the project has not yet proven to be profitable. Furthermore, because of poor waste management, a legislative committee had recommended its closure in August of last year.
The full implementation of this recommendation is still pending. Businesspeople claim that Bangladesh Chemical Industries Corporation’s (BCIC) planning mistakes are to blame for the tannery industry’s decline.
