Uttar Pradesh Leather and Footwear Policy - DRAFT 2025

Note: This policy has been created by civilians, not by any official authority.

1. Introduction and Objectives

Context

Uttar Pradesh is a key player in India's leather and footwear production, with hubs in Kanpur, Agra, Unnao, and other regions. However, it lags in global competitiveness and export market integration, especially in high-end leather goods and synthetic footwear.

Goals

• Make Uttar Pradesh the top destination for leather and footwear manufacturing in India.
• Promote both leather and non-leather footwear (synthetic, fabric, EVA, etc.) with distinct support mechanisms.
• Support existing and new units, differentiating between MSMEs and large enterprises.
• Provide end-to-end value chain support: land, power, water, labor, technology, marketing, ESG (Environment, Social, Governance), freight, working capital, design, incubation, and export promotion.
• Establish Uttar Pradesh as a global export hub for luxury goods while promoting sustainability and modern technology.

2. Sectoral Segmentation and Sub-Segmentation

A. Leather Sector (General - Not Footwear)

A.1 Existing Units

A.1.1 MSMEs

• Modernization Incentive:
  • 35% capital subsidy for modernization (max ₹2 crore).
  • 50% subsidy on imported/indigenous machinery (max ₹1.5 crore).
• Working Capital: 5% interest subvention for 5 years (max ₹50 lakh/year).
• Energy Subsidy: ₹2/unit for 5 years (max ₹20 lakh/year).
• Employment Incentive: ₹2,000 per new worker/month for 5 years (min 25 additional workers).
• ESG and CETP: 100% subsidy for Effluent Treatment Plant (ETP)/Common Effluent Treatment Plant (CETP) upgradation/setup.
• Skill Upgradation: 100% cost reimbursement for in-plant skill training (max ₹10,000/worker).

A.1.2 Large Enterprises

Same as MSMEs but with higher limits:

• Modernization cap: ₹5 crore.
• Power subsidy: ₹3/unit (max ₹50 lakh/year).
• Employment: ₹3,000 per new worker/month (min 100 additional workers).
• Special ESG compliance package: up to ₹2 crore per plant.

A.2 New Units

A.2.1 MSMEs

• Land Subsidy: 50% on UPSIDA/private industrial park land (max ₹1 crore).
• Capital Subsidy: 40% on plant and machinery (max ₹2 crore).
• Building Subsidy: 20% of cost (max ₹1 crore).
• Power Subsidy: ₹2/unit for 5 years.
• Employment Incentive: ₹2,000 per worker/month for 5 years (min 25 workers).
• Freight Assistance: ₹3/km per tonne for exports (max ₹25 lakh/year).
• Marketing and Branding: ₹10 lakh/year for domestic expos, ₹20 lakh/year for international expos.
• Design and Incubation: Plug-and-play support in clusters; ₹25 lakh grant for approved design startups.

A.2.2 Large Enterprises

Same as MSMEs with enhanced caps:

• Land subsidy: max ₹5 crore.
• Capital subsidy: max ₹5 crore.
• Freight: max ₹1 crore.
• Employment: ₹5,000/month per employee (min 100 workers).
• Customized support package for export-oriented large units.

B. Leather Footwear Sector

B.1 Existing Units

B.1.1 MSMEs (Domestic-Oriented)

• Modernization: 35% subsidy on plant and machinery (max ₹1 crore).
• ESG & Waste Management: ₹50 lakh subsidy for cleaner production/ETP.
• Working Capital: 5% interest subvention (max ₹25 lakh/year).
• Employment: ₹2,000/month/worker (min 25 new workers).

B.1.2 MSMEs (Export-Oriented)

All benefits of B.1.1 plus:

• Freight subsidy: ₹3/km/tonne (max ₹25 lakh).
• 50% subsidy on certifications (ISO, REACH, etc.).
• 75% subsidy on export marketing (max ₹10 lakh/year).

B.1.3 Large Enterprises (Domestic)

• Power subsidy: ₹3/unit.
• Employment: ₹3,000/month/worker for 5 years.
• 30% subsidy on automation tools and conveyorized lines.

B.1.4 Large Enterprises (Export-Oriented)

All benefits of B.1.3 plus:

• ₹50 lakh/year for international expos.
• ₹5 crore capital subsidy.
• ₹1 crore for global branding assistance.

B.2 New Units

B.2.1 MSMEs (Domestic)

• Land subsidy: 50% (max ₹1 crore).
• Power subsidy: ₹2/unit.
• Employment: ₹2,000/month/worker (min 25).
• Capital expenditure (capex) subsidy: 40% (max ₹2 crore).
• 25% subsidy on raw material storage infra.
• Component Ecosystem: 50% support for setting up last, sole, insole, adhesives, and packaging units.

B.2.2 MSMEs (Export-Oriented)

All benefits of B.2.1 plus:

• Freight subsidy: ₹3/km/tonne.
• 75% support for international exhibitions.
• ₹25 lakh for design and tech adoption.
• Support for CE marking, REACH, and export-specific infrastructure.

B.2.3 Large Enterprises (Domestic)

• Land subsidy: ₹3 crore.
• Capex subsidy: ₹5 crore.
• Employment: ₹3,000/month/worker.
• Building subsidy: ₹1 crore.
• Dedicated electricity feeder with 50% cost reimbursement.

B.2.4 Large Enterprises (Export-Oriented)

All benefits of B.2.3 plus:

• Export cluster integration support: ₹1 crore.
• ₹50 lakh/year for export marketing.
• ₹50 lakh for luxury branding.
• ₹25 lakh for custom certification and testing.

C. Non-Leather Footwear Sector (Synthetic, EVA, Fabric)

C.1 Existing Units

C.1.1 MSMEs (Domestic)

• Modernization subsidy: 30% (max ₹1 crore).
• Employment: ₹2,000/worker/month (min 25 workers).
• ₹25 lakh/year for component unit upgradation.

C.1.2 MSMEs (Export)

All benefits of C.1.1 plus:

• Freight support: ₹3/km.
• ₹10 lakh/year for export expos.
• ₹25 lakh for international certifications.

C.1.3 Large Units (Domestic)

• Power subsidy: ₹3/unit.
• Employment: ₹3,000/month/worker.
• ₹1 crore for machinery.

C.1.4 Large Units (Export)

• Capex subsidy: ₹5 crore.
• Marketing fund: ₹1 crore.
• 50% component unit support.

C.2 New Units

C.2.1 MSMEs (Domestic)

• Land subsidy: 50% (max ₹1 crore).
• Power subsidy: ₹2/unit.
• Capex subsidy: 40% (max ₹2 crore).
• Building subsidy: 25%.
• Component Ecosystem Support: 50% support for PU soles, EVA moulding, adhesives, fabric uppers, packaging.

C.2.2 MSMEs (Export)

All benefits of C.2.1 plus:

• Freight support, marketing, and certification assistance.
• Design-led startup fund: ₹25 lakh/unit.

C.2.3 Large Units (Domestic)

• Land subsidy: ₹3 crore.
• Employment: ₹3,000/month/worker.
• Capex support: ₹5 crore.

C.2.4 Large Units (Export)

All benefits of C.2.3 plus:

• Export infra: ₹1 crore.
• ₹50 lakh/year for global expos.

3. Common Infrastructure Support

• Footwear Parks in Kanpur & Agra: CETPs, plug-and-play sheds, power infra, roads, dormitories.
• Luxury Leather Goods Cluster: Targets export and high-end brands.
• Design Studios & Incubation: ₹25 lakh/startup for luxury, smart footwear, vegan leather.
• Common Facility Centre (CFC): Max ₹20 crore grant to Special Purpose Vehicle (SPV) of MSME units for established/new clusters.
• Footwear Cluster Development:
  • Support for new clusters (min 25 acres) in PPP model, similar to Pledge Park.
  • Assistance for common tool rooms, prototyping centres, and mold development: ₹10 crore per cluster.

4. Environment, Social, Governance (ESG)

• 100% subsidy for CETPs.
• Green ratings mandatory for all large units within 5 years.
• 100% reimbursement for ESG certification costs (max ₹25 lakh/unit).
• Social: Housing, ESI, childcare, restrooms - ₹10 lakh/unit grant.
• Governance: Online approvals, inspections, facilitation portal.

5. Raw Material and Component Ecosystem Support

5.1 Raw Material Support - Leather Segment

• Leather Sourcing Hubs: Centralized hubs in Kanpur, Unnao, Agra with ₹2 crore support per hub.
• Grading and Certification:
  • ₹50 lakh/unit grant for leather grading and quality certification units.
  • 75% reimbursement for international standards (e.g., ISO, LWG).
• Warehouse Subsidy:
  • 50% subsidy for raw leather warehouses (max ₹1 crore/unit).
  • Additional 25% for climate-controlled facilities.
• Bulk Procurement Scheme: Interest-free working capital loans for leather producer cooperatives/buyer groups; dedicated procurement portal.
• Animal By-Product Utilization: 60% capital subsidy (max ₹1 crore) for glue, gelatin, bone-based units.

5.2 Raw Material and Component Support - Non-Leather Segment

• Synthetic Material Parks: ₹25 crore grant for industrial areas focused on synthetic leather, EVA, PU, fabric, technical textiles.
• Component Manufacturing Support: 50% capital subsidy (max ₹2 crore/unit) for:
  • PU soles, EVA sheets/moulds, PVC/TPR soles, insoles, laces, zippers, toe-puffs, counters, foam, mesh, knitted uppers, footbeds, adhesives, packaging.
• Testing and Certification Labs: 75% support for BIS/ISO labs (max ₹2 crore/unit); subsidies for CE marking, REACH, durability testing.
• Component Cluster Upgradation: ₹20 crore per cluster for upgrading infrastructure in Agra, Kanpur, Noida; ₹10 crore for tool rooms, prototyping, mold development.
• Input Market Linkages: Vendor development programs and a digital raw material marketplace portal.

6. Export Promotion and Logistics

6.1 Export Infrastructure

• Inland Container Depots (ICDs): ₹25 crore support for ICDs near Agra, Unnao, Kanpur with cold chain, warehousing, scanning.
• Air Cargo Complex: ₹10 crore subsidy for cargo facilities at Lucknow/Noida airports; priority for leather/footwear exporters.
• Export Warehousing: 50% subsidy for pre-shipment export warehouses with climate control (max ₹1 crore/unit).
• Integrated Export Clusters: ₹25 crore per cluster for shared packing, quality control, logistics.

6.2 Export Incentives and Subsidies

• Freight Subsidy: ₹3/km/tonne for exports via road to ICD/port (max ₹1 crore/unit/year).
• Rebate on Air Freight: 25% subsidy on international air cargo for premium/luxury goods (max ₹50 lakh/unit/year).
• Export Market Development Assistance: Up to ₹50 lakh/year per exporter for international expos, overseas marketing, PR, websites, catalogs, digital campaigns.
• Brand India - Uttar Pradesh Promotion: ₹10 crore annual corpus for state-led branding in UAE, Europe, US, Japan; joint promotion with industry associations/EPCs.
• Export Certification Support: 75% subsidy for CE, REACH, ISO, LWG, BIS certifications, testing charges, sample dispatch, audit fees.

6.3 Export Facilitation and Policy Interface

• Uttar Pradesh Leather and Footwear Export Cell: Under Department of MSME with export officers, EPC liaison, customs coordination.
• Fast-Track Clearance: 48-hour single-window clearance for exporters during shipment.
• MOUs with EPCs & International Partners: Tie-ups with CLE, FIEQ, AEPC, trade missions for B2B matchmaking.
• Export-Ready Incubators: ₹50 lakh/startup grant for export-focused design startups in premium/luxury/eco-friendly footwear and bags.

7. Monitoring and Implementation

• Nodal Department: Department of MSME and Export Promotion, UP.
• UP Leather and Footwear Promotion Board: To be constituted.
• Review: Yearly with industry stakeholders.
• Incentive Delivery: Via Single Window Clearance Portal.