GST, raw material costs pushed footwear prices by 20-50% in 1 yr: V Noushad

V Noushad urged the government to take steps to boost the local manufacturing of components, machines and designs in the non-leather category

A senior official of the Confederation of Indian Footwear Industries (CIFI) said that the new Goods and Services Tax (GST) rate for products below Rs 1,000 and the rise in raw material costs has led to a 20-50 per cent hike in prices of finished footwear, across categories, in the last one year.

Starting January, GST rates for footwear priced below Rs 1,000 increased to 12 per cent as compared to 5 per cent before that. On the other hand, for products above Rs 1,000-mark, this was kept unchanged at 18 per cent. "In the last one year, raw material prices have gone up  by 50 per cent. In some categories of hawai or rubber footwear, prices have gone up from Rs 100 to Rs 200. Higher GST meant additional impact and some wholesalers are on strike and unable to take products because of that," V Noushad, managing director of Walkaroo and vice-president of CIFI, told Business Standard.

He also urged the government to take steps to boost the local manufacturing of components, machines and designs in the non-leather category to reduce the dependence on China. "For some items like sports shoes and value-added footwear, we are heavily dependent on China. We are interacting with the government to bring in Taiwanese and Korean manufacturers to India," he said. Non-leather segment contributes to 85 per cent of the industry sales. The association is also against the move to bring in new Bureau of Indian Standards norms for the sector as it may affect around 3 million people who are dependent on the footwear industry.

Noushad started Walkaroo in 2012 from Coimbatore in Tamil Nadu and has already touched a turnover of Rs 1,560 crore in 2019-20 and is expected to cross Rs 1,8000 crore in 2021-22. "Our target is to become a Rs 5,000 crore company in the next five years. We want to mark our presence as a pan-India player and also focus more on export markets like the Middle East," he added. Around 5 per cent of the company's business is currently coming from exports to Middle Eastern countries. The company has around 12 manufacturing units in the process of digitally connecting its network to enhance the performance at the wholesale and retail front, to adapt itself to the customer needs. It has around 500 dealers and over 100,000 retail outlets.