Centre Plans USD 1 Billion Support Package For Footwear Industry Amid US Tariffs

New Delhi, Jan 20 (KNN) The Centre is planning a USD 1 billion support package to strengthen India’s footwear manufacturing sector, which is hit by a 50 percent US tariff on exports.

The initiative is part of the government’s push to boost domestic production, expand exports, and integrate Indian footwear manufacturers into global value chains. Quoting unnamed officials, a Times of India report said that the proposed package is in advanced stage of finalisation and a formal announcement about it may come shortly.

Comprehensive Support Across the Value Chain

The package aims to support the full footwear value chain, from raw materials to finished goods, by providing incentives to investors in this labour-intensive industry. Earlier plans for a production-linked incentive (PLI) were shelved due to policy changes.

The plan aims to boost domestic production, including soles and other components, reducing dependence on imports from China.

India’s Footwear Industry: Challenges and Opportunities

India ranks as the world’s second-largest footwear producer and has long been a key player in leather footwear. 

However, the global shift toward sports and athleisure shoes has changed the competitive landscape, with China dominating and Vietnam establishing large-scale production hubs. Many Indian manufacturers now primarily serve as contract producers for foreign brands, especially from Taiwan.

Industry leaders note that high import duties on essential raw materials restrict domestic scaling, while the US tariff has further disrupted investment plans, slowing the sector’s growth.

Domestic Market and Export Potential

The government seeks to increase domestic footwear consumption, as the average Indian currently buys about two pairs annually versus six to seven pairs globally, with plans to raise this to three pairs per person.

India is negotiating free trade agreements with the European Union and the United Kingdom, which could provide duty concessions on footwear exports, helping manufacturers expand globally and utilise new production capacity efficiently. 

The proposed package aims to bolster India’s footwear industry, enhance input self-reliance, and make domestic firms more competitive at home and abroad.

(KNN Bureau)