Tuesday, August 3, 2021

India’s footwear industry expected to grow 8 times by 2030

According to the global footwear market – industry trends and forecast to 2028 report published by Research Dive, the footwear market is expected to grow at 12.83% in the forecast period of 2021 to 2028.

The changing living habits, growing economies, and growth and awareness in health, especially due to the Covid pandemic, and reopening of lockdowns have given a boost to the demand for footwear across the globe. Further, the demand for fashionable, trendy, athletic, and sports shoes has opened the scope of development and growth for the footwear Industry.

What does this mean for India?

According to Invest India’s report on the ‘Non-leather footwear Industry in India”, India, the 2nd largest consumer, and producer of footwear in the world is projected to increase 8 folds by 2030. India’s footwear market is estimated to reach $15.5 billion by 2022, from $10.6 billion in 2019. India is the 2nd largest producer of footwear, 2nd largest exporter of leather garments, and the 5th largest exporter of leather goods. This presents an India to the world, full of opportunities in the footwear sector.

It is expected to grow at 11% over the next five years. It is expected that India’s non-leather footwear industry will cross $6 billion mark by 2024. Globally, 86% of footwear consumption has become non-leather by volume and India is witnessing a similar trend. This has added to revenue generation by the non-leather footwear industry.

The leather, footwear, and accessories sector in India contributes about 2% to the country’s overall GDP and is a major job provider.

India is only behind China as the largest producer of footwear in the world. Its share is 55.8% while that of India is 10.7% in global production. In terms of consumption, India is the 2nd largest consumer with a world share of 11.7%.

Footwear industry in India

The footwear industry in India is divided into two segments- leather and non-leather. It is driven by a robust domestic market. However, the non-leather footwear sector presents India with huge potential to grow in the years to come. In worldwide consumption terms, 86% of global footwear consumption has become non-leather by volume.

Around 75% of production in the non-leather footwear industry comes from the unorganized sector in India. This includes micro, small, and medium enterprises (MSMEs). Places like Chennai, Ranipet, Ambur, Mumbai, Kanpur, Agra, Jalandhar, Ludhiana, Delhi, Karnal, Sonepat, Faridabad, Pune, Kolkata, Calicut, and Ernakulam are some of the major non-leather footwear production centres across the country.

Import/Export

India is also among the top exporters of footwear. According to World Integrated Trade Solution (WITS), in 2019, the top countries to which India exports footwear include United States, United Kingdom, Germany, China, and France. In 2018, India exported 262 million pairs, becoming the 6th largest exporter of footwear in the world.

In terms of imports, India imported 289 million pairs in 2018 and is the world’s 10th largest importer, in terms of quantity, having a world share of 2.2%.

Employment generator

The footwear industry in India employs 2 million workers, making it one of the highest employing sector in the country. According to a report released by the Department for the Promotion of Industry and Internal Trade (DPIIT), the sector can generate 250 jobs for every investment of Rs 1 crore. Further, for every 1,000 pairs produced and sold in India per day, the sector can create 425 jobs spanning manufacturing, allied industries, and retail.

Factors influencing the growth

The footwear industry posses growth potential for several reasons. The sector is witnessing exponential growth due to the liberal investment policies in the leather and footwear sector. The government has permitted 100% foreign direct investment (FDI) through the automatic route for the footwear sector. Further, the sector is now de-licensed and de-reserved. With the advancement in technology, innovation, and machinery, availability of manpower, growth of e-commerce, shifting habits of buyers, the prospects for the footwear industry has taken a positive direction. Initiatives like Make-in-India, Self-reliant India, Start-up India have opened the door for expansion and growth.

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