Budget 2023: Footwear industry seeks lower duty on raw materials, interest subvention and PLI scheme

However, India's footwear exports are miniscule compared to China's 85 percent share in the global footwear industry and that's why businessmen in Agra are hoping for incentives and concessions in the upcoming budget.

Puran Dawar, Head of AFMEC said, “For import substitutes to be produced in India, PLI scheme is really important. Capital cost in India is the key. If we want to scale up, we can't grow with 8-10 percent interest rate. We don't need cash subsidies, but minimum 5 percent interest subvention for minimum 5 years is required. Raw material should either be zero duty or maximum 10 percent duty. 10 percent of taxes paid by us should be invested in our social security schemes.”

Industrialists here say that a reduction in GST is necessary to drive sales of Made in India footwear against Chinese imports.

Pradeep Wasan, CMD of Wasan Group said, “We urge government to bring GST on footwear from 18 percent to 5 percent so that we get a level playing field and we don't allow Chinese imports into India. If we have funds, we can face competition, if funds are expensive then it becomes difficult. China today has 86 percent of world market of shoes, India is around 3 percent. If we get to 10 percent then also it will be a huge jump.”

Agra's footwear industry hopes the budget would reduce duties on imported raw materials and provide for higher rates for remission of duties

Chetan Gupta, Director at Gupta HC Overseas said, “There needs to be concessional import of raw materials, machinery and technology, so that India can make world class products. We need to rationalise and standardise lot of government procedures so that there is lot of ease of business for all exporters. Footwear should attract higher RoDTEP. There is a flaw in classification, which in turn results in loss of RoDTEP. It usually attracts 1.3 percent, but we sometimes get 1 percent, so it's a 0.3 percent loss of RoDTEP.”

The recent FTA with the UAE led to a 64 percent jump in leather exports to the West Asian countries in November. While the government wants the leather industry to explore newer territories, the industry is seeking lower duty on raw material, interest subvention, social security and a PLI scheme from the upcoming Union Budget.