Budget proposes focused scheme for footwear industry, to create 2.2 mn jobs

Scheme to support design capacity, component manufacturing, and machinery for producing non-leather 'quality footwear'

Finance Minister Nirmala Sitharaman’s Budget 2025 speech on Saturday promised a “focus product scheme” for the footwear and leather industry, expecting to generate 2.2 million jobs, Rs 4 trillion turnover, and targeted exports of more than Rs 1.1 trillion.

 

The proposal will help suppliers of non-leather footwear brands like Nike, Adidas, Puma, New Balance, and Reebok. These companies are betting on India as a manufacturing hub as part of the China-plus-One policy.

 

“To enhance the productivity, quality, and competitiveness of India’s footwear and leather sector, a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for the production of non-leather quality footwear, besides support for leather footwear and products,” said Sitharaman.

 

The Budget fully exempted basic customs duty on Wet Blue leather, also called chrome-tanned leather, to facilitate imports for domestic value addition and employment. It fully waives off 20 per cent export duty on crust leather (hides and skins) to facilitate exports by small tanners.

 

“These measures are a huge boost for the domestic and export industry and will further attract global players in this employment-intensive sector to India. The relief on wet blue is crucial as India is almost completely import-dependent,” said N Mohan, director and chief executive officer (footwear business) of Kothari Industrial Corporation.

 

The proposals come at a time when global suppliers like Dean Shoes (Long Yin Investment), Pou Chen Corporation, Hong Fu Industrial Group, Zucca, Sports Gear, Oasis Footwear, Lengthy, ShoeTown (in partnership with Phoenix Kothari), and Apache have lined up investment plans in Tamil Nadu. The clients of Hong Fu include iconic brands Nike, Converse, Vans, Adidas and Reebok. Hong Fu entered India last year with a Rs 1,500-crore footwear manufacturing facility at the SIPCOT Industrial Park in Panapakkam, nearly 85 km from Chennai.

 

“The government has lined up incentives not just on capital investments, but on operational investments as well. This will be a huge boost for global players, considering the current geopolitical situation,” Mohan said.

 

To create a raw material supply base for these upcoming players, Kothari Industrial Corporation has signed an agreement with the Tamil Nadu government to bring in 19 suppliers from countries like Taiwan, Vietnam, China, and Portugal. The agreement is expected to lead to an investment of Rs 4,000 crore and create 50,000 jobs.