Duty cut may lead to improved Indian footwear

The cut in excise duty could boost production and improve footwear quality.

The decision to cut India’s excise duty on leather shoes priced at more than Rs 1,000 ($16) from 12 per cent to 6 per cent has been welcomed by representatives of the nation’s footwear industry. According to the Agra Footwear Manufacturers and Exporters Chamber (AFMEC), located in the northern Indian state of Uttar Pradesh, this move will boost the production level of shoes in the country, as well as improve the quality of shoes being manufactured in India.

The reason given for this positive attitude is that footwear producers will make fewer advance payments of excise duty before finalising deals. In particular, Agra is expected to benefit, as most shoes made in the region are leather. After hearing of the cut in duty, a manufacturer in Agra stated that the quality of footwear would improve because in order to cut costs, shoemakers were using low quality material to keep the price below the Rs 1,000 threshold. Now he believes this will change, as manufacturers may use better quality materials.

Agra is said to be the largest footwear-manufacturing region in India, contributing around 65 per cent of the total domestic consumption. It is also claimed to have a 28 per cent share of all the footwear exported from India.

Publishing Data

This article was originally published on page 4 of the April 2015 issue of SATRA Bulletin.

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