Integrated Development of Leather Sector (IDLS) scheme

The leather industry is one of India’s most employment-intensive sectors, offering vast opportunities for MSMEs. However, challenges like outdated technology and limited access to capital often hinder growth. The Integrated Development of Leather Sector (IDLS) Scheme was introduced to help you overcome these barriers by providing financial assistance for technology upgradation, modernization, and capacity expansion. This scheme also encourages new entrepreneurs like you to set up units, ensuring the sector’s overall development and global competitiveness.

What is the Integrated Development of Leather Sector (IDLS) Scheme?

Launched on December 21, 2017, by the Department for Promotion of Industry and Internal Trade (DPIIT), the IDLS Scheme aims to enable leather and footwear units including MSMEs to upgrade their technology, modernize operations, and expand capacity. The scheme is implemented through a paperless, online system, making it easier for you to apply and track your application.

Objectives of the IDLS Scheme

• Help you upgrade technology and production processes in your leather business.
• Support you in expanding or diversifying your unit, whether you’re in tanneries, footwear, components, leather goods, leather garments, or saddlery.
• Promote formal employment generation in the leather sector.

Key Features of the IDLS Scheme

• The Integrated Development of Leather Sector (IDLS) Scheme offers an investment grant to provide financial assistance for modernization, technology upgradation, and capacity expansion in leather sector units.
• The scheme is implemented for a period of 4 years, from 2022 to 2026.
• Assistance is available only for projects undertaken after January 1, 2020.
• The maximum financial assistance is ₹15 crore per unit for modernization or new setups. An additional 5% financial assistance is available for the purchase of domestically manufactured machinery.
• The scheme covers tanneries, footwear, components, leather goods, garments, saddlery, and accessories.
• The entire application process is paperless and online for your convenience and transparency.
• The scheme is managed by Project Implementation Units (PIUs): FDDI handles product units, and CLRI manages tanneries.

Financial Assistance Offered Under the IDLS Scheme

• For MSMEs (other than North Eastern Region): 40% of plant and machinery cost, up to ₹15 crore.
• Investment grant of 30% of the cost of Plant and Machinery will be provided to other units established in North Eastern Areas.
• For Other Units: 20% of plant and machinery cost.
• Additional Incentives: 5% extra grant for domestically manufactured machinery; 10% extra for North East units.
• Eligible Costs: Machinery value, GST, transportation, import duty, installation, and commissioning (up to 5% of total landed cost).

Eligibility Criteria for IDLS Scheme

Eligibility

As a new MSME owner, you are eligible if:

• Your unit is in tanneries, footwear, components, leather goods, garments, or saddlery.
• Your unit has made a cash profit for at least two years (certified by a bank or CA).
• You are undertaking modernization, expansion, or technology upgradation after January 1, 2020.
• You have all the required registrations and NOCs from government departments.
• You submit proof of payment, purchase, and installation of machinery.

Non-Eligibility

You are not eligible if:

• Your unit is not in the specified leather or footwear sectors.
• You fail to provide the required documents or NOCs.
• Your unit does not comply with pollution control or other statutory norms.

Documents Required for IDLS Application

• Udyog Aadhaar Registration Certificate
• UID (Aadhaar Card)
• PAN Card
• GSTIN Registration Certificate
• EPFO Registration Certificate
• Registration certificates (company, GST, etc.)
• NOCs from relevant government departments
• Proof of cash profit (last two years)
• Purchase invoices and payment proofs for machinery
• Installation and commissioning certificates
• Pollution control compliance documents

How to Apply for the IDLS Scheme?

Step 1: Register on the official IDLS online portal.

Step 2: Fill in the application form with business and project details.

Step 3: Upload all required documents.

Step 4: Submit the application online.

Step 5: The Project Implementation Unit (FDDI/CLRI) reviews and processes your application.

Step 6: On approval, the grant is released directly to your business account.

Benefits of the IDLS Scheme

• Financial Support
  You get up to 40% grant on machinery costs, reducing your capital burden and making modernization affordable.
• Technology Upgradation
  The scheme helps you adopt advanced, efficient technologies, improving productivity and product quality.
• Employment Generation
  By expanding and modernizing, you can create more jobs and contribute to formal employment in the sector.
• Ease of Application
  With a fully online, paperless process, you save time and effort when applying for assistance.
• Additional Incentives
  Extra grants for domestic machinery and North East units encourage local manufacturing and regional development.

Real-World Examples of IDLS Scheme

• Upgrading a small footwear unit to semi-automated production.
• Expansion of a leather goods MSME with new machinery.
• Modernization of a tannery in the North East region.

Related Government Support Plans with IDLS for MSMEs

Final Words

If you’re an MSME owner in the leather sector, the IDLS Scheme is a valuable opportunity to modernize your unit, improve competitiveness, and generate more jobs. With a streamlined, online process and significant financial support, it’s designed to help you grow sustainably and contribute to India’s leather industry leadership.