Indian Footwear Industry: Opportunities, Challenges, and the Road Ahead

The Indian footwear industry is an essential part of the economy. It is not only integral to daily life but also plays a crucial role in the country’s industrial development. Over time, the Indian footwear market has evolved with changes in fashion, technology, and consumer preferences, making it one of the largest footwear producers globally.

In this article, we will provide an in-depth analysis of the Indian footwear industry, covering its current state, challenges, growth prospects, and investment opportunities.

Current Landscape of the Indian Footwear Industry

India’s footwear industry is not only a vital part of the national economy but also serves as the growth engine for the leather industry. India is the second-largest footwear producer in the world after China, accounting for 13% of global footwear production, while China holds a share of approximately 67%.

Additionally, India accounts for 2.2% of global footwear exports. It ranks as the ninth-largest footwear exporter in the world. According to DGCIS, India’s footwear exports increased from US $1.9 billion in FY21 to US $2.5 billion in FY24.

India produces around 2,209 million units of footwear annually, while China produces approximately 14,200 million units. In the Indian footwear market, casual footwear dominates, comprising about two-thirds of the total retail market. Furthermore, men’s footwear accounts for 58% of the market, and non-leather footwear holds a 56% share.

Challenges and Issues Facing the Footwear Industry

Despite the rapid growth, the Indian footwear industry faces several challenges. Key issues include 70% of the industry being unorganised, the rising problem of counterfeit products, a lack of branding, and shrinking margins. Additionally, complex inventory management remains a critical challenge.

Intense competition and low margins have highlighted the need for greater organisation in the industry. Furthermore, competition from China and other low-cost markets poses a significant challenge. With 38.2% of India’s total footwear imports coming from China, the domestic industry is under pressure. India primarily exports its footwear to the USA, UAE, and the Netherlands.

Key Drivers of Growth in the Footwear Industry

Several factors are driving the growth of the Indian footwear industry, including urbanisation, rising demand for premium footwear, changing preferences among millennials, and technological advancements. Additionally, India’s population is expected to reach approximately 1.5 billion by 2030, further boosting demand for footwear.

With increasing incomes and purchasing power, consumers are willing to spend more on premium products. The premium footwear market share is expected to rise from 47% in FY21 to 49% by FY25, driven by this trend.

Government Initiatives in the Footwear Industry

The ‘Make in India’ campaign promotes domestic production and aims to establish India as a global manufacturing hub. This campaign plays a key role in boosting local production in the footwear industry.

According to the Economic Survey 2023-24, the leather and footwear sectors benefit from export promotion schemes under the Foreign Trade Policy 2023. Additionally, initiatives like the Market Access Initiative (MAI) Scheme, Trade Infrastructure for Export Scheme (TIES), and the Interest Equalisation Scheme (IES) offer several advantages to the sector. These initiatives are crucial for the industry’s growth and improving its global competitiveness.

Investment Opportunities in the Indian Footwear Industry

The Indian footwear industry presents numerous investment opportunities. Major companies like Relaxo, Bata India, and Liberty Shoes are listed on Indian stock exchanges such as NSE and BSE.

Relaxo Footwear Limited: Relaxo is India’s largest footwear manufacturer. It is the biggest in terms of volume and the second-largest in terms of revenue. With over 350 stores, the company is known for its in-house manufacturing and innovation.

Bata India Limited: Founded in 1931 as Bata Shoe in Kolkata, Bata India has been a leader in expanding customer reach through digitalisation and e-commerce.

Liberty Shoes Limited: Established in 1954 in Karnal, Haryana, as Pal Boot House, Liberty Shoes is renowned for its high-quality, innovative products. In 2023, it achieved a turnover of Rs 656 crores.

Future of the Indian Footwear Industry

According to the Economic Survey 2023-24, the current value of the Indian footwear market is $26 billion, which is expected to grow to $90 billion by 2030. A report by 1lattice suggests that the market could reach Rs 190.9 thousand crores by FY28, growing at a CAGR of 11% between FY25 and FY28.

Furthermore, the future of the Indian footwear industry appears bright. By 2030, India’s population is projected to reach approximately 1.5 billion, further increasing the demand for footwear. Additionally, changing preferences among millennials and Gen Z, such as a focus on comfort and fashion, have opened up new opportunities in the industry.

That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!

The companies mentioned in the article are for information purposes only. This is not an investment advice. Disclaimer: Teji Mandi Disclaimer