The government is preparing a policy to continue providing the existing cash incentive to the leather goods and footwear sector for next five years, aims at boosting exports as well as attracting foreign direct investment (FDI), officials said.
The commerce ministry requested the finance ministry recently to take necessary steps in this regard, they added. The finance ministry was also working on the proposal, an official of the finance division said.
A draft policy to boost export capacity of the sector was also prepared and placed at a recent meeting of the cabinet committee on economic affairs for consideration.
The cabinet body, however, suggested including the industries ministry while finalising the draft policy, according to an official document obtained by the FE.
The final draft of the policy is supposed to be placed before the cabinet body again by September 30.
The government offered 15 per cent cash incentive against exports of the products in the current fiscal year. In cases of exporting crust and finished leather, the cash incentive is 10 per cent.
The sector earned US$ 1.23 billion in fiscal year (FY) 2016-17 by exporting leather, leather products and footwear, according to Export Promotion Bureau (EPB) figures.
It was little more than the previous four-year average of around $ 1.1 billion.
The sector fetched $248.16 million in export earnings in the first two months of the current FY, registering 9.54 per cent growth over the same period of the previous fiscal year.
"We expect the export earnings from the sector to reach at a level of US$ 5.0 billion by 2021," a high official of the commerce ministry told the FE Wednesday.
Besides the government support, the tanners will have to make efforts to achieve the long-term target, a source concerned said.
Presently, the leather sector is the second-largest export earner of the country, employing over 65,000 skilled and unskilled workforces, he said.
Prime Minister Sheikh Hasina at the Dhaka International Trade Fair (DITF) 2017 had announced leather as the 'product of the year' for 2017.
The commerce ministry is working to prepare an annual work plan for making the year successful.
As part of the annual program, Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) is going to organise a three-day programme styled 'Bangladesh leather footwear, leather goods international sourcing show 2017' on November 17.