Plots for Reliance Industries in Delhi NCR invites all major players in the footwear industry to establish a manufacturing facility at Reliance MET. The Haryana government has approved the Model Economic Township (MET) project in Jhajjar, which is located along the western border of Delhi in Haryana. We envision a fully integrated industrial township on an 8250-acre site with benefits such as tariff zones, economic zones, development in clusters, logistic hubs, residential, commercial, and recreational development. Overview of the Indian Footwear Industry
In the framework of the mega MET Project, the Footwear Park on 400 acres is one of the clusters dedicated to the Footwear and Leather industries.
This industry is the engine of growth for the entire Indian leather industry. Footwear is a very significant segment of the leather industry in India.
India accounts for 13% of global footwear production, which totals 16 billion pairs, making it the second-largest global footwear producer after China. The country produces 2065 million pairs of different types of footwear (leather footwear – 909 million pairs, leather shoe uppers – 100 million pairs, and non-leather footwear – 1056 million pairs). About 115 million pairs of shoes are exported by India. Nearly 95% of the country’s production is used to meet its own domestic needs.
Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharashtra, Kanpur in Uttar Pradesh, Jalandhar in Punjab, Agra, Delhi, Karnal, Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut, and Ernakulam are the major production centers in India. The footwear manufacturing industry employs approximately 1.10 million people.
Dress Shoes, Casuals, Moccasins, Sports Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals, and Chappals made of rubber, plastic, P.V.C., and other materials are among the footwear exported from India.
The footwear sector has now been de-licensed and de-reserved, allowing for capacity expansion on modern lines with cutting-edge machinery. To aid in this process, the government has granted permission.
To aid this process, the government has authorized 100 percent Foreign Direct Investment through the automatic route in the footwear sector.
A favorable investment climate for attracting foreign investment and increasing cost competitiveness. The Government of India is constructing a dedicated Footwear Complex and Footwear Components Part, which will house footwear clusters.
Footwear imports (both leather and non-leather) increased from US$ 124.43 billion in 2013 to US$ 134.943 billion in 2017, growing at a CAGR of 2.1 percent. During 2017, India accounted for 2% of global imports.
ITC, Geneva, and DGCI &S, Kolkata are the sources.
Footwear is the driving force behind India’s leather industry’s expansion. In 2016-17, India’s footwear exports totaled US$ 1933.13 million, accounting for 45 percent of India’s total leather sector exports of US$ 5739.93 million.
- The value of India’s leather footwear exports increased from US$2018.18 million in 2012-13 to US$ 1933.13 million in 2016-17.
- The value of India’s footwear component exports increased from US$ 320 million in 2012-13 to US$ 335.24 million in 2016-17.
- Non-leather footwear exports from India increased from US$ 202.06 million in 2012-13 to US$ 296.68 million in 2016-17.
Major Markets: In 2016-17, the main markets for Indian footwear were the United States (14.6 percent), the United Kingdom (14.4 percent), Germany (12.2%), France (6.4 percent), Italy (4.8 percent), Poland (4 percent), the United Arab Emirates (3.7 percent), Spain (3.3 percent), Belgium (3.2 percent), and the Netherlands (2.5 percent). These ten countries account for 80.53 percent of India’s total footwear exports.
Nearly 90% of India’s footwear exports are to European countries and the United States. The future growth of Indian footwear in India will be market-driven. The European Union and the United States are major consumers of Indian footwear.
Future Trends: Considering its past performance, current global trade trends, the industry’s inherent strengths, and growth prospects, the footwear industry intends to increase production, thereby increasing exports from the current value is $1.73 billion USD.
India’s Domestic Footwear Industry
The domestic footwear industry in India is valued at approximately US$ 3200 million, with annual growth projected to be 11 – 12 percent.
Organized retail accounts for 25% of total sales and is growing at a rate of 35-40% per year.
Footwear retailing accounts for approximately 9% of the total consumer market.
Men’s footwear accounts for roughly half of the market.
- Branded footwear (including store labels) accounts for roughly half of the market, with the men’s footwear market driving the growth.
- Ladies and children’s footwear, as well as sports footwear, have a lot of potential in the domestic market.
The footwear industry in India is poised for rapid growth:
India has cutting-edge manufacturing facilities. The footwear industry has progressed from manual footwear manufacturing methods to automated footwear manufacturing systems. World-class machines are installed in footwear production units. These machines, which are operated by skilled technicians, aid in the realization of any new innovative idea. The footwear industry has benefited greatly from the sector’s support systems. The footwear component manufacturing industry in India is well developed. The future growth of the Indian footwear industry will be market-driven, with a focus on the EU and US markets. The Indian footwear industry demonstrates its expertise and class in global footwear trade by improving its technology and quality year after year.
Indigenous footwear’s competitiveness vis-à-vis imported footwear:
The natural advantage of the Indian footwear industry in terms of factor endowments such as the availability of leather and cheap labor does not appear to have been converted into a comparative advantage in production. In recent years, import growth has tended to outpace growth in footwear exports, which may be due, at least in part, to a loss of export competitiveness. Using the unit value of exports and imports of some items as proxies for prices, it is discovered that the unit value of imports in the majority of footwear items, whether leather or non-leather, is lower than the unit value of exports of these items.
- A little more than 53% of consumers preferred branded footwear, while 27% preferred non-branded footwear and 10% were found to be brand neutral. Surprisingly, the preference for branded footwear was higher in non-metropolitan areas, with as many as 62 percent of consumers polled indicating a preference for branded footwear.
- Contrary to popular belief, the cost of footwear did not appear to be a major factor in influencing consumer preference. The majority of consumers (60 percent) would rather have high-quality footwear.
- Although a significant 42 percent of consumers valued fashion and design of footwear, the majority of consumers (58 percent) showed a distinct preference for comfortable and durable footwear. Overview of the Indian Footwear Industry
Footwear preference – Source: DMG Consulting Pvt Ltd, Noida.
- Consumers buy footwear all year, and there is no set period or time of year when they do so. However, the start of the school year appears to be the busiest time for purchasing footwear.
- The majority of consumers (more than 75% in metro and non-metro urban areas) preferred indigenous footwear, while approximately 17% preferred neither indigenous nor imported footwear. Surprisingly, more than 10% of consumers in non-metro towns preferred imported footwear, compared to only 6% in metro cities.
- Leather footwear was preferred by approximately 55% of those polled, while non-leather footwear was preferred by 45%. In non-metros town, however, more than 70% of consumers preferred leather footwear and less than 30% preferred non-leather footwear.Overview of the Indian Footwear Industry