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Indian Footwear Industry in a Nutshell
- The footwear sector is a very significant segment of the Leather Industry in India.
- Footwear is the engine of growth for the entire Indian leather industry and India is the second largest global producer of footwear after China, accounting for 14% of global footwear production. of 14.52 billion Pairs.
- India Produces 2065 million pairs of Different Categories of Footwear (Leather Footwear 909 million pairs, Leather Shoe uppers 100 million pairs and Non-leather footwear 1056 million pairs)
- India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand.
- The major production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal, Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam.
- Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials.
MNC Brands sourced from India |
MNC Brands Sold in India |
Indian Brands sold in India |
Acme, Clarks, ColeHann, Deichmann, Ecco, Elefanten, Florsheim, Gabor, Hasley, Hush Puppies, Double H, Justin, Marks & Spencer, Nautica, Nike, Nunn Bush, Reebok, Salamander, Stacy Adams, Tony, Lama, Next, Bally |
Aldo, Bally, Clarks, Ecco, Florshiem, Ferragammo, Hush Puppies, Lee cooper, Lloyd, Marks & Spencer, Nike, Nine West, New Balance, Reebok, Rockport, Stacy Adams |
Red Tape, Bata, Liberty , Khadims, Lakhani, Metro, Action |
- Nearly 75% of India’s Export of Footwear is to the European Countries and the USA.
- The Indian Footwear Industry provides employment opportunities to a total of 1.1 million people, mostly from the weaker sections of the society. Out of this, about 0.2 million are employed in the organized sector, 40% of whom are women. Remaining 0.9 million people are engaged in unorganized footwear sector like rural artisans, cottage and household units etc.
- The Footwear Sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the Footwear Sector.
INDIA ’S FOOTWEAR EXPORT GROWTH OVER THE LAST FOUR DECADES
Footwear export has increased from US$40.15 million in 1977-78 to US$ 1475.83 million in 2007-08
CHART SHOWING GLOBAL IMPORT OF FOOTWEAR VS INDIA ’S EXPORT OF FOOTWEAR
India ’s Exports of Footwear – Country-wise Share in Total Exports (2007-08) – Source: DGCI& S
Major Markets for Indian Footwear:
The European Union and the USA are the major markets for Indian Footwear accounting for 79.95% and 9.22% share respectively in India’s total footwear export. The major markets for Indian Footwear are Germany 16.66%, UK 16.31%, Italy 15.32%, USA 9.22%, France 7.81%, Spain 5.10%, Netherlands 4.91%, Portugal 2.50%, UAE 2.48% and Denmark 1.18%. These 10 countries together accounts for nearly 81.49% of India’s total leather products export.
Country-wise export of Footwear from India – 5 years
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|
(Value in Million US $) |
CAGR |
Country |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
Growth % |
Germany |
146.23 |
164.73 |
170.97 |
217.23 |
245.92 |
13.87%. |
UK |
154.44 |
192.62 |
195.78 |
208.2 |
240.77 |
11.74%. |
Italy |
107.65 |
103.63 |
134.35 |
186.11 |
226.10 |
20.38%. |
USA |
89.17 |
107.34 |
131.07 |
127.15 |
136.01 |
11.13%. |
France |
50.84 |
64.84 |
74.48 |
99.81 |
115.24 |
22.70%. |
Spain |
38.06 |
46.86 |
63.7 |
64.57 |
75.22 |
18.56%. |
Netherlands |
20.09 |
20.03 |
32.96 |
48.57 |
72.49 |
37.82%. |
Portugal |
15.12 |
18.75 |
22.15 |
35.03 |
36.86 |
24.95% |
UAE |
14.94 |
18.36 |
25.78 |
34.64 |
36.61 |
25.11% |
Denmark |
11.7 |
13.75 |
18.37 |
14.65 |
17.44 |
10.49% |
Australia |
8.44 |
8.00 |
11.58 |
10.11 |
12.48 |
10.27% |
Sweden |
6.29 |
6.95 |
6.77 |
7.99 |
12.04 |
17.62% |
Canada |
8.71 |
9.84 |
11.95 |
10.91 |
10.41 |
4.55% |
South Africa |
7.23 |
6.72 |
8.26 |
12.11 |
8.54 |
4.25% |
Japan |
2.01 |
2.55 |
3.17 |
3.07 |
4.63 |
23.19% |
Others |
86.81 |
125.8 |
133.9 |
156.76 |
225.07 |
26.89% |
Total |
767.73 |
910.77 |
1045.24 |
1236.91 |
1475.83 |
17.74% |
Source: DGCI&S |
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Indian Footwear Industry - A Vision Document 2010
Footwear is the engine of growth of the leather industry, currently accounting for an export value of US$1212 million, holding a major share of 41% in India’s total leather trade. Considering this fact, we have set an ambitious target of US$ 4.5 billion in respect of Footwear export from India by 2010-11 where the overall export of leather products will reach US$6.98 billion, wherein footwear alone will account for a share of 65% in India’s total leather export trade.
Current Export of Footwear and Projections by 2010-11
Investment Opportunities:
- The Government of India is keen to promote investments into the Indian leather sector, and for this purpose, it has radically simplified and rationalized the policies, procedures and regulatory aspects.
The current industrial policy is very conducive to the promotion of Indian leather industry both in terms of domestic trade as well as exports.
Taxation:
- India has a well developed tax structure.
- Income tax, Customs duties, Central Excise, Sales Tax and Service tax are the main taxes levied by the Central Government
- VAT, Stamp duty, State Excise, Land Revenue, Tax on professions are the principal taxes levied by the State Governments
- Local Bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc.
Corporate Tax is currently taxed at:
- 30% in the case of domestic companies and surcharge @ 10% of tax
- 40% in the case of foreign companies and surcharge @ 2.5% of tax
Recent / proposed FDIs, Joint Ventures in Footwear Industry
Zahonero Virgili SL, Spain (FDI)
Conceria Virginia, Italy (Joint Venture with Forward Group)
Top Fondi, Italy (Joint venture with Farida Group)
Xie Zhan Moulds, China (Joint Venture with Farida Group)
Formas Kunz, Brazil - This facility is coming up in Footwear Component Park, Chennai
Feng-Tay Enterprises Co.Ltd. Taiwan
This is a SEZ proposed in an area of 275 acres, coming up in SIPCOT Industrial Estate, Cheyyar(TN). Feng Tay is a manufacturer of sports shoes, skate shoes and casual shoes for Nike and other global brands
Apache footwear, China
This FDI is coming up in Tada Mandal, Nellore(AP), in an area of 340 acres. Apache is a supplier of shoes for Adidas and has manufacturing facilities in China
Takplast, Italy (a company producing soles and heels) signed a JV with an Indian company in Chennai
Suolificio Mazza, Italy (a company producing leather soles) has decided to start up production in India also, in Chennai.
Ge.Ma.Ta , Italy (a company producing tanning machines) is currently defining a JV and will very soon start up its activities in Ranipet
Shosen , Italy (a company producing leather goods articles, in particular high quality bags. In Italy, it produces also for Prada) is defining a project with an Indian leather goods company to start up activities in Kolkata
Cobaa, Italy (a company producing insoles) is concerned in investing in India (initial phase)
Bartoli, Italy (a company producing fibreboards) is studying an investment project in India
Ipr, Italy (a company producing PU and TR/ Rubber soles) is involved with seeking a partner to invest in India
Special Economic Zone (SEZ) Parks:
- A Footwear SEZ Park is being established in Tamil Nadu, at the SIPCOT Industrial Estate at Irungattukottai, situated at a distance of 34 kms from Chennai.
- A land of 150 acres has been earmarked for this purpose and it is proposed to make available about 105 acres of saleable land to domestic as well as international footwear companies.
- The State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) is the implementation agency for this project.
- The Footwear Park will be developed on global standards, with adequate common infrastructure facilities such as Design Studio, testing and on-site training facilities, Display Centre-cum-Warehouse, non-conventional energy and other energy saving applications.
- Another SEZ for Leather Products is also under way at Ranipet in Tamil Nadu, in an area of about 260 acres. Apart from the above, there is a proposal to setup 10 Small Integrated Leather Parks (SILP) in different parts of the country.
Future Prospects:
Future growth of Indian footwear industry in India will continue to be market driven and oriented towards the European and the US markets. Technology partnerships with major merchandising houses in USA and market leaders in Europe are decided advantages in the integrated developmental plan of India. Investment backed technology support for footwear component industry is being sought to be outsourced.
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