Indian Footwear Industry: Reports

http://www.assocham.org/prels/shownews-archive.php?id=4112
Press Releases
Footwear import have increased by 133% in 5 years: ASSOCHAM
Thursday, August 01, 2013
Currently USD 35 billion Indian footwear industry is loosing fast its share in the international markets and has been
importing increasingly from China to meet the demand of all categories men, women, children and sportsmen, reveals the
ASSOCHAM recent study.
The just concluded study of Indian Footwear Industry published by ASSOCHAM has revealed the highest share of 63
percent in Indias total imports is from China and during the last five years it has gone up by 132.67 percent.
Releasing the study, the chambers secretary general D.S. Rawat said Indian footwear industry has grown at a CAGR of 15
percent and expected to grow by 25 percent for the next ten years and likely to touch USD 60 billion mark by 2015 from
the current level of USD 35 billion.
According to the study while the unorganised sector represent 70 percent of the footwear industry and provides 18 lac
direct jobs, only 30 percent is catered by the organised sector providing direct jobs to 8 lac people. The industry provides
indirect jobs to over 20 lac people.
Mr Rawat said exports of the exports of the Indian footwear industry have grown from $63.9 million to $195.8 million i.e.
almost tripled. The exports have grown at a CAGR of 10.7% in the period 2001-02 to 2012-13. By analyzing the current
trends, it can be forecasted that the exports would cross the mark of $250 million by 2015. Exports are expected to grow
at a CAGR of 15% in the next 5 years. About 75% of the total footwear exports are the mens footwear and rest 25% is
contributed by womens, childrens and sports footwear.
The top major exporting destinations of India in the last five years are United Kingdom, Germany and USA. United
Kingdom accounts for around 20 percent of the total exports of Indian Footwear Industry, whereas Germany accounts for
around 15 percent and USA accounts for around 10 percent of the total exports of Indian Footwear industry. Exports to UK
have risen by about 45 percent from 2008-09 to 2012-13. Exports to USA have increased by around 44 percent whereas
exports to Germany have increased by around 10 percent from 2008-09 to 2012-13. The growth of exports has been the
highest in the case of Belgium. The exports to Belgium have risen by 126.6 percent.
The major countries from which the Indian Footwear Industry imports are China, Vietnam and Italy. The highest share in
Indias total imports is of China i.e. around 63 percent of the total imports. As China is dumping its goods in India at a
lower rate and is offering a wide variety, this is causing a threat to the Indian domestic market for Footwears. People
prefer Chinese footwear over domestically produced goods as they are cheaper and offer a wide variety of goods.
Increasing imports are restricting the growth of the Indian Footwear Industry.

In the last 5 years, Chinas imports have increased by 132.67 percent and are eating the major market size of all
categories i.e. men, women and children. The imports from China have surged the most by rising about 295 percent.
Imports from USA have declined but imports from all other countries have increased tremendously.
Interestingly, ASSOCHAM said while looking at the export import ratio, it is showing a declining trend over the ten year
period indicating a fall in the exports and a rise in the imports. The ratio has fallen from almost 30 percent to 5.5 percent.
Although, the exports of the footwear industry have increased but the imports have increased more, so the ratio of exports
to imports has fallen drastically.
Among the top ten countries to which the Indian Footwears are being exported, exports to Belgium have registered the
highest CAGR of 22.7 percent in the last five years whereas Italy has registered the lowest CAGR of -9.1 percent in the last
five years. Due to the increasing imports from China to Italy, Indian presence has reduced in the total imports of Italy and
thus has recorded a negative growth rate. The maximum exports of India are made to UK and US as they acquire the
largest share in Indias total Footwear exports with 18.9 percent and 11.3 percent respectively.
The chamber has recommended creation of a training centre where the laborers can be imparted training, and the
government should make provisions to provide and facilitate new and advance technology to the footwear industry so that
it can become more competitive.
ASSOCHAM has further suggested that the footwear industry should improve cost competitiveness through value chain
efficiencies. There should be implementation of best practices at a firm level and at the sectoral level it should be through
cluster based approach by setting up cross-industry clusters and support them through governmental interventions on
infrastructure like port clearances and power.
As FDI brings in scale, efficiency in operations and latest management practices for the industry to benefit, ASSOCHAM
suggests that the footwear industry should attract more and more FDI. The footwear sector had seen only Rs.500 Crores
of FDI (Which is only 0.65% of Indias total FDI in 2012).