Hike in custom duty on shoes not to impact business

Hike in basic custom duty over the import of shoes, as proposed in the Union Budget on Saturday, is not likely to have any significant impact on the business, leading shoe makers said on Saturday. While presenting the budget for FY 2020-21, Union Finance Minister Nirmala Sitharaman proposed to hike customs duty on shoes from existing 25 per cent to 35 per cent, along with raw materials.

Global Sport Brand Puma Managing Director Abhishek Ganguly said increase in the customs duty on the imported shoes may not have any major impact as India currently does not have the infrastructure, capability, skillset and technology to manufacture higher-end footwear. "Therefore, increasing customs duty of footwear from 25-35 per cent may not have a significant impact on imports," he said.

Presently, at the entry price, companies manufacture 30 per cent of its footwear in India. "The government should proactively promote and enable footwear factories which can handle more technical manufacturing. This is a huge opportunity as India can definitely take share from China and far East – not only for domestic, but also international consumption," said Ganguly.

Aero Club, maker of Woodland & Woods, welcomed the hike in custom duty and said that it would protect the local industry. "While this move is a welcome move especially for a Make in India brand like us who believe in domestic quality manufacturing, it will marginally shake our production costings due to our dependencies on good quality/imported raw materials required for manufacturing the ruff and tough shoes, Woodland is known for," said Aero Club Managing Director Harkirat Singh.