Foreign companies wishing to set up units to manufacture tanning and leather footwear, including components in India would be allowed 100 per cent foreign direct investment (FDI) through automatic route without a licence, Commerce and Industry Minister Murasoli Maran said.

Speaking at a ‘Destination India’ seminar in Milan on Wednesday, Mr. Maran explained that the move followed removal of reservation of small scale industries in the above segments of the leather industry.

The Central Leather Research Institute of India enjoyed a share of about 30 per cent of intellectual products like patents and copyrights generated in the leather sector during 1997-2001, he said. 

The minister also said the Tenth Plan document on leather policy, to be implemented during 2002-07, would provide all-out support to the Industry and facilitate development and infrastructure on a scale comparable to the best in the world.

He further said with foreign investment in mind, two projects for development of integrated tanneries were proposed on a pilot basis and that modernization of tanneries was being expanded in scope through a massive increase in Governmental assistance.

Earlier, India and Italy signed agreements, which would enable the Indian Industry to benefit from Italian technology and investment for the rapid development of the leather sector in India.

A memoranda of understanding to this effect were signed in the presence of Mr. Maran and leaders of the Italian leather industry.