Footwear industry players seek tax reduction for growth

While the footwear industry in India is on the growth track, with big companies like Arvind eyeing entry into the segment, footwear manufacturers and retailers are seeking reduction in taxes to grow manufacturing and curb dumping of cheap Chinese products.

The footwear industry has good prospects but lack of skilled labour and quality raw material is marring the growth of factories, despite a few among them set up in excise-free zones. According to All India Footwear Retailers and Manufacturers Association (AIFRA), in last year’s Union Budget, the FM had reduced excise duty from 12 percent to 6 percent on footwear priced Rs 500-Rs 1,000 but rationalization of the excise duty on footwear remained unaddressed. Experts point out that India’s per capita consumption of footwear stands at one pair against the global average of four.

While China has 200 factories producing 20,000 pairs a day and constitutes about 60 percent of the global footwear production, India just has three such factories, with exports less than 1 percent of the world trade.