Tariff reforms, non-leather focus to up India's footwear share: Report

A 10-per cent tariff on India’s imports of raw materials required for footwear production has led to it falling behind other footwear markets.

Global demand has shifted to non-leather segments, in which China and Vietnam dominate.

The report noted that India’s share of the $281.76-billion global leather and footwear exports market was 1.85 per cent in 2024, at par with its 2-per cent share in 2004.

“Global footwear demand between 2020 and 2024 has been driven by non-leather products, which now account for 61 per cent of exports, while leather footwear is losing ground worldwide. In contrast, India’s export growth has been stronger in leather footwear (~8 per cent) than in non-leather (~5 per cent), leaving its global share largely stagnant,” the report observed.

India’s small and medium enterprises (SMEs) involved in footwear production should be offered incentives to meet the domestic input in footwear imports, it suggested.

It also suggested focusing on building research and development (R&D) hubs, collaborating with institutions for skill development, and undertaking marketing initiatives to increase India’s global market share.

The report recommended creating sector-wise cluster areas, allowing MSMEs to reduce their raw material sourcing costs, thereby enabling them to focus on infrastructure modernisation.

“Tamil Nadu, with hubs like Chennai, Ambur, Ranipet, and Vellore, has become India’s leading exporter of footwear and leather products by leveraging clustering strategies and supportive policies. Replicating such targeted approaches in other key centres, such as Uttar Pradesh, Maharashtra, and Haryana, could diversify India’s export base,” the report stated.

Four product categories in the leather and footwear market dominated global demand in 2024, accounting for 85.5 per cent of the value of exports.

The first of them is leather trunks, suitcases, vanity cases and briefcases; the second is footwear having outer soles and uppers of rubber or plastics; the third is footwear having outer soles of rubber, plastics, and leather, and uppers of leather; and the fourth category is footwear with outer soles of rubber, plastics, and leather and uppers of textile material.

India’s exports to the world in these four categories were worth 43.79 billion, accounting for a mere 1.2 per cent share of the global market value.

The report said of the total value of global processed leather exports in 2024, the country’s share was 10 per cent. Of the total value of global leather apparel exports in 2024, its share was 9.9 per cent. However, the global market demand in these categories is merely $8.57 billion in value.

ALCHEMPro News Desk (DS)