The government of Tamil Nadu on Tuesday unveiled the Footwear and Leather Products Policy 2022, through which it aims to attract investment worth ₹20,000 crore and create more than two million jobs. This policy will be valid until March 31, 2025 and will be periodically reviewed.
According to the policy unveiled by Chief Minister MK Stalin, two special packages will be offered – one for Footwear and Leather Goods Manufacturing (FLP) and the other for FLP Design Studios. Investments made on or after April 1, 2022 will be considered eligible for the incentives.
Under the first package, given the higher turnover-to-assets ratio in FLP manufacturing, a turnover-based subsidy will be applicable as a percentage of the turnover of each exercise. Footwear-related industries or component industries located outside the clusters are eligible for a fixed capital grant of 10% of eligible fixed asset investment, to be paid in 10 equal annual installments. The enterprise could choose to avail the fixed capital subsidy from the date of commercial production or after reaching the minimum eligible investment threshold of ₹150 crore and the minimum employment threshold of 100 jobs, depending on the last possibility. The government also said it will reimburse 50% of physical and digital marketing expenses of FLP manufacturing units that export more than 50% of their products, capped at ₹20 lakh per year per company, up to a period of five years.
FLP Design Centers are eligible for a fixed capital grant of 5% of eligible fixed asset investment, disbursed in five equal annual installments upon meeting minimum investment and employment criteria. Design centers established in greenfield or brownfield clusters will be eligible for reimbursement of 50% of rental expenses, up to ₹30,000,000 per year, during the standard investment period.
The government will create new non-leather footwear clusters in the form of 30 to 50 acre shoe parks, with plug-and-play facilities, through its agencies such as SIPCOT/SIDCO and public partnerships- private. In addition, given the high level of participation of women in the sector, shelters for working women will be established in or around the clusters by SIPCOT with funding from the Tamil Nadu Shelter Fund.