Agra footwear industry faces new challenge amidst declining business

The Agra footwear industry, which is already hit by the global meltdown with export orders declining almost 30 percent, is now bogged down by another problem.

Footwear manufacturing units are slowly coming up in infrastructure-rich towns like Noida and Chandigarh cutting into the business of small fashion footwear exporters here.

“Export orders have slowed down to a trickle this year with the foreign banks avoiding credit facilities to major importers and due to this footwear units in the town are running at less than 50 percent of their production capacity,” said Agra Footwear Manufacturers and Exporters Chamber chairman AS Rana.

According to Kapil Bose, director, Bajwa Exports, there has been a sharp decline in export orders this year as against the first quarter of 2009. “The industry has lost about 30 percent of its export orders that used to arrive in the months of January to March,” he said.

Footwear units, he said, coming up in cities like Noida and Chandigarh had better infrastructure. “Though there aren’t enough number of units right now, these are impacting the business of small exporters of Agra,” he said stressing on the need to develop a supporting infrastructure for the industry in Agra.

However, big exporters of the town are unperturbed by the competition and are eyeing a substantial share in the Rs 1,300 crore economic package announced by the Centre for the leather industry.

Speaking to Business Standard, Puran Dawar, managing director, Dawar Group and convener (footwear), Council for Leather Exports, said while Kanpur was the biggest exporter of utility footwear and Chennai had the largest share in men’s footwear, Agra occupied the top place in both men’s and women’s fashion footwear exports.

Stating that the business had dropped significantly this year and the industry would find it hard to maintain the 27 percent growth rate it has been achieving in the previous few years, he said the situation would change soon as China was facing several trade restrictions and Eastern European countries were also becoming expensive for footwear manufacture.

“Ultimately the bulk buyers will have to turn to India to fulfil their requirements and the country’s 4 per cent share in the world footwear trade will hopefully rise to at least 7 percent in the coming years,” he said.