footwear industry
The impact of 50% tariff imposed by America on Indian products is now clearly visible on the country’s footwear industry. To reduce this pressure and strengthen the sector, the central government is preparing a relief package of about 1 billion dollars. According to reports, the policy level discussion on this package is in the final stages and its official announcement may be made soon.
The aim of the government is not only to provide relief to exporters but also to strengthen the entire footwear ecosystem. The proposed package will cover the entire value chain from raw materials, components and finished products. Since this sector is labor-intensive and employs millions of people, there will be special emphasis on encouraging investors.
India is the second largest footwear producing country
India is the second largest footwear producing country in the world, but in the last few years, China and Vietnam have strengthened their hold in the global market. Especially in the sports shoes and athleisure segment, the dominance of these countries has increased. Leather shoes and traditional products, such as Kolhapuri slippers from Maharashtra, are still well known in India. Union Minister Piyush Goyal has already said that Kolhapuri slippers have the potential to export up to $1 billion annually.
The need for relief package is also being felt because domestic companies are dependent on imports from China for many essential inputs. On top of that, due to high duty on raw materials, domestic production becomes expensive, which weakens the competitiveness of Indian companies. The industry says that the way the government had given a comprehensive package in the electronics sector, the same model should be adopted in the footwear sector also.
Demand will increase rapidly
The government is also keeping an eye on increasing domestic consumption. It is estimated that in the coming years, the shoe consumption of an average Indian may increase from 2 pairs to 3 pairs annually. Changes in GST rates have also helped this sector. Now only 5% GST is applicable on footwear priced between Rs 1000 to Rs 2500, which has brought relief to the middle class and demand is expected to increase. Overall, the proposed relief package is not only being considered a solution to the current crisis, but is also being seen as an important step towards making India a global footwear hub.