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Budget 2018 and the Industry

Image Credit: PIB

Finance Minister Arun Jaitley’s 2018 budget’s focus is more rural-centric.  When such a budget is presented it is hard to find critics, yet many are left wondering silently, how the humongous schemes will be funded? In the footwear sector, Mr. Jaitley’s budget, with strong emphasis on turning India a manufacturing hub, has fulfilled the much-awaited dreams of most. However, some, with custom duty hiked, are left disappointed and many have been compelled to look for alternatives. Just to present you a better picture, we have gathered elaborate views of some of the industry’s stalwarts.

“India needs a mission to become a leading manufacturer of non-leather footwear. The imposition of a higher (20%) custom duty on Footwear, is not good for the growth of footwear consumption. In the past higher duty incidence has resulted in a higher revenue leakage. Higher duties don’t guarantee, manufacturing in the country. India has the potential to increase its local manufacturing, if we address the current challenges in manufacturing.”-
Rakesh Biyani, Joint MD, Future Group
“Hike in import duty will help the industry to push Make in India. We are happy that the government has recognized the true potential of the Industry in contributing to the growth of economy. The industry was expecting a merit rate of 5% GST on all footwear. Footwear’s a basic necessity, but has a very low per capita consumption of 2 pairs per annum, considerably lower than the global average, the Government should seriously consider reducing the rate to 5%.”- Rafique Malik, Chairman – Metro Shoes Ltd        

“The industry is optimistic of the impact of 2018 budget in the long run. With the increase in import duty from 10% to 20% the domestic manufacturing sector will emerge more competitive and will in turn help build the job market.”-Anupam Bansal, Liberty Shoes

“The rate of the consumption went down and the growth was stagnant after demonetisation and implementation of GST. I believe that the budget could have been better for our industry, as in the current scenario it would be difficult to for the footwear sector to rebound sales and consumptions.”- Ishaan Sachdeva, Director, Alberto Torresi

“The Budget augurs well for the footwear industry by providing it benefits in line with Apparels. It must be recalled that the industry benefited from the GST provisions, as the cost structure came off and that results in direct savings to companies. The developments on the FDI policy also reflects the liberalising contour for the industry. I think the ball is now in the industry’s court to make the most of this.”- Rajesh Kadam l COO, Inc.5 Shoes

“The proposed customs duty changes are aimed at empowering domestic manufacturing industries to give a fillip to the ‘Make in India’ campaign as well as reduce litigation. However, issues such as restriction on input credit, simplification of return filing process, review of the place of supply rules and review of the GST rates are awaiting GST Council decisions.”- Sameer Dhingra, MD Banish Shoes
“Customs duty increasewill be instrumental in achieving our country’s vision of making India a global hub footwear manufacturing. Local manufacturing will create more job opportunities. There are no direct or indirect benefits extended to the leather and footwear trade and the industry is totally disappointed with 18% GST rate. Sadly, the unorganised trade is back to the earlier practice of circumventing the tax.”- Opinder Singh Chattwal, MD Japjee Group
“The customs duty hike will push foreign players towards manufacturing and sourcing components more within the country. The current move will further enhance the manufacturing sector leading to job creation. We plan to double up our production capacity this financial year and will continue to scale up our manufacturing capacities to meet the growing customer demand.”- Sanjay Shah, Director Arianna Shoes

“A great move to boost “make in india” by increasing the import duty. FM may not have given any direct benefits to the industry, but several announcements made will have an indirect effect. In the long term, Rs. 2600 cr allocation to the leather and footwear industry will catapult well for job creation in the country.”- Kuldeep Singh, Director, San Frissco

“The spotlight has moved from ease of doing business to ease of living for the common man. FM raised the duty with an intent to boost global Indian manufacturing footprint. India enjoys a high skill base but the industry is a lot more dependent on imported raw materials and machinery to meet global standards. The increase will certainly impact the cost of production and the growth of footwear consumption.”- Amit Chopra, MD SHOES & ACCESSORIES

“The increase in custom duty is going to have a huge impact on the footwear e-commerce industry as imported footwear forms the highest revenue generating category. However, it shall help emerging Indian footwear brands, like ours, to promote make in India as well as Make for India. There has been a decline in Export business so it’s a big opportunity for exporters to cater to the growing demand of footwear in India.”- Sunaina Harjai, Director Hats Off Accessories Private Limited