India’s Footwear Industry Growing; Imports From China up 133%

Currently $35 billion USD Indian footwear industry is loosing fast its share in the international markets and has been importing increasingly from China to meet the demands in all categories men, women, children and sportsmen.

The just concluded study of ‘Indian Footwear Industry’ published by the industry body Assocham has revealed that the highest share of 63 percent in India’s total imports is from China and during the last five years it has gone up by 132.67 %.

Releasing the study, Assocham’s 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 unorganized 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.Rawat added that 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. The analysis of the current trends say 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 men’s footwear and rest 25% is contributed by women’s, children’s 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 India’s 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, China’s 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.