Last updated: March 15th, 2022 11:16 AM

Revised Guidelines of Integrated Development of Leather Sector Scheme (IDLS)

The Integrated Development of Leather Scheme (ISLS) is a sub-scheme of the Indian Footwear and Leather Development Programme (IFLDP). The DPIIT has recently announced that IFLDP has been approved for continuation till March 31, 2026. In line with the extension, DGFT notified the Revised Guidelines of Integrated Development of Leather Sector Scheme (IDLS). The primary objective of this scheme is to upgrade the technology and production of the leather manufacturing industry. It is also aimed at encouraging entrepreneurs to set up and diversify new units in various areas as specified by the Government. To attract investment into the sector, assistance for new units would also be provided.

Indian Footwear and Leather Development Programme (IFLDP)

IFLDP aims at the development of infrastructure for the leather sector, addressing environmental concerns specific to the leather sector, facilitating additional investments, employment generation, and increase in Leather production. Click here to know more about the Indian Footwear and Leather Development Programme (IFLDP)

The objective of the IDLS Scheme

The primary objective of the Integrated Development of Leather Sector Scheme (IDLS) is to enable the following units to upgrade themselves leading to productivity gains, right-sizing of capacity, cost-cutting, design, and development

• Tanneries units
• Footwear units
• Footwear component units
• Leather goods and accessories units
• Leather garments units
• Harness & saddlery manufacturing units

IDLS Scheme also aims to enable Employment generation including simultaneously encouraging entrepreneurs to diversify and set up new units in the areas.

Eligible Units for IDLS Scheme

All existing units in the Footwear and Leather industry are eligible for the Integrated Development of Leather Sector Scheme.

• Leather goods industry
• Saddlery
• Leather footwear industry, leather footwear component industry
• Non-leather footwear industry
• Non-leather footwear component sector

Eligibility Criteria for IDLS Scheme

• The unit should have a cash profit for 2 years (as certified by the bank or full time practicing Chartered Accountant or any other document as prescribed by the Steering Committee) to avail the assistance under IDLS
• The unit undertaking modernization or capacity expansion or technology up-gradation on or after 1st January 2020 is eligible for assistance.
• To attract investment into the sector, assistance for new units would also be provided.
• All projects under the sub-scheme should lead to a demonstrable increase in the following:
  • Employment generation
  • Production capacities
  • Unit value realization
  • Better compliance with pollution control norms

Eligibility Criteria for New Unit

New eligible units would be considered for assistance under the Indian Footwear and Leather Development Programme only on submission of the following documents:

• All the required registration documents
• NOCs from all concerned Government Department for setting up of the unit
• Fulfillment of other eligibility criteria mentioned above

Condition to get financial assistance under IDLS Scheme

Financial assistance under the Integrated Development of Leather Sector Scheme shall be considered for such projects in which the followings have been undertaken on or after 01.01.2020:

• Payment has been done
• Machinery has been purchased and installed

Note: The assistance would not be provided for second-hand machinery as the scheme is essential to support the modernization and technology up-gradation of the units.

Scope of the IDLS Scheme

Scope of Integrated Development of Leather Sector Scheme (IDLS) is as follows:

• Modernization of tanneries
• Modernization of footwear & footwear components units
• Modernization of leather product and accessory units
• Modernization of Harness & saddlery unit

Existing units/new units would have the option to go for single or multiple activities as mentioned above with an overall assistance limit

Quantum of Assistance under IDLS

The financial assistance under the Scheme will be is as follows;

Investment grant

• Investment grant of 40% of the cost of Plant and Machinery  will be provided to the Micro, Small & Medium Enterprises (MSMEs units)
• Investment grant of  30% of the cost of Plant and Machinery  will be provided to other units established in North Eastern Areas

Financial assistance

• The financial assistance under the scheme will be 30% of the cost of plant and machinery to Micro, Small & Medium Enterprises (MSMEs) units of other areas
• The financial assistance under the scheme will be 20% of the cost of Plant and Machinery to other units,
• For technology up-gradation /modernization and/ or expansion and setting up a new unit subject to a ceiling of Rs.15 crore.
• In addition to this, 5% additional financial assistance of the cost of plant and machinery will be provided for the domestically manufactured machinery.

The cost of up-gradation/setting up new units under the scheme will include the following:

• Bill value of machinery
• Sales and excise tax/GST
• Transportation and transit insurance cost
• Import related duty
• Installation and commissioning charges including civil and electrical work restricted to 5% of the total landed cost of the machine.

Implementing Agency for IDLS

The implementation agency for IDLS is the Project Implementation Unit (PIU). In view of a larger scope of this sub-scheme, Pius will function from two centers- one at CLRI, Chennai for tanneries and the other at FDDI, Noida for footwear, footwear components, leather goods & garments, saddlery, and accessory units

Application Procedure

An online workflow application shall be put in place by FDDI/CLRI for applications, processing fund releases, and monitoring outcomes, which may also capture Udyog Aadhaar, UID, PAN, GSTIN, EPFO Registrations. Note: The Government's financial assistance cannot be utilized for purposes other than for which it has been sanctioned. The amount released by the Government cannot be utilized towards adjustment of default in repayment of principal and payment of interest by the borrower