Madan Shoe Co. manufactures this men's dress shoe with cowhide uppers and rubber outsoles. It comes in UK sizes 6 to 11.

Suppliers are modernizing lines and equipping QC inspectors with better skills to enhance manufacturing procedures.

The footwear industry in India is continuously upgrading its production processes in an effort to sustain the development of this increasingly important sector.

To keep up with the increasing demand for India-made shoes, large makers are looking for better ways to improve their efficiency. One of these methods is the continuous upgrade of assembly lines to lower the rejection rate. Additional training for QC teams and importation of equipment such as sole-molding and attaching machines are done to ensure qualification for international standards.

The national government is providing assistance in this endeavor by decreasing the import tax of industry-specific machines by 5 percent. Aside from helping suppliers keep their manufacturing processes updated, the administration helps them promote their products in international trade shows by setting up a Market Development Assistance fund, particularly for those who are targeting the US and the EU. This program selects local companies that create innovative and sustainable products and gives them financial aid to establish booths in major international exhibits.

Development of tanning facilities is also done to ensure that there are enough raw materials for the sector. Leather-processing areas are continually built such as those in the cities of Chennai, Nellore, Agra and Kolkata. The trade association Council for Leather Exports estimates that these investments will generate income of about $270 million in the next three years.

Exports

Footwear is becoming one of the country’s leading industries in terms of foreign revenue. India is the tenth-largest shoe manufacturer in the world, accounting for about 2 percent of global output, according to the International Trade Centre or ITC. The nation’s footwear exports have the highest growth rate from 2012 to 2013 at 33 percent.

In the fiscal year 2012-13, local suppliers sent abroad 2 million pairs, the majority of which is made of leather. According to the trade group Associated Chambers of Commerce and Industry of India, overseas shipments of domestic shoes are projected to grow at an annual rate of about 15 percent over the next five years. By 2015-16, the line is forecast to be worth $6 billion, roughly 50 percent more than the current level.

One of the major factors that contribute to the industry’s growth is the relocation of factories operated by international brands, including Coach, Tommy Hilfiger, Lacoste and Zara. Local suppliers for these companies are generally categorized under the organized sector, which are businesses that are officially registered under the Department of Commerce. They take up nearly 90 percent of domestic footwear output.

According to the ITC, leather footwear is the largest contributor to turnover at nearly 94 percent. Shoes made of fabric and other materials are minor lines.

Earnings from models that adopt hides and skins climbed nearly 27 percent to about $1.9 billion in 2013-14. The EU is the predominant market with the UK, Italy and Germany as the top destinations.

Exports of fabric footwear also surged by 18 percent compared with the previous fiscal year. The EU is the largest market, followed by the US and Canada.

Overseas shipments of shoes made of other materials dipped by 8 percent. The EU, Nepal and the UAE are the key destinations for this line.

Competitive advantages

Abundant supply of raw leather is the main strength of the industry. Twenty-one percent of the world’s cattle and buffalo population and 11 percent of all sheep and goats are found in India. In addition, tanning facilities have been well established across the nation to roll out about 2 billion square feet of skins and hides for production of leather goods.

Another advantage enjoyed by the sector is a large pool of workers, who can be trained to operate assembly lines and machines. Some of them are further educated about various leather-processing methods and how to develop different models using this input.

The establishment of various hide-manufacturing clusters in different states also propels the industry forward. By developing these production hubs, companies are assured of a steady supply of raw materials and laborers.

This article is an excerpt from India Sourcing: Footwear, published by the Hinrich Foundation. For the full report with complete Industry Overview and 19 suppliers, click here.

Product gallery

The following is a selection of footwear models made by India suppliers. For detailed industry and production information, and supplier outlook over the next 12 months, visit India Sourcing: Footwear. For information on related industries in India and other emerging economies in Asia, go to www.developingcountrysourcing.com.

Agra Shine Footwear

Model: LOF-34
Price: $13 to $15
Description: Men's derby shoes; genuine suede uppers, TPR outsoles and synthetic leather or canvas lining; UK sizes 6 to 11; in khaki, black, blue, tan, brown, beige and red

Hollywood Footcraft

Model: HFC-889
Price: $8 to $9
Description: Men's slippers; PU leather uppers and insoles; soft EVA and PVC midsoles, and TPR outsoles; UK sizes 6 to 11

Indian Shoe Colors

Model: HLS-29
Price: $30 to $35
Description: Slippers; leather straps and insoles; handmade; UK sizes 6 to 11; in beige and white

Karan Footwear Agency

Model: KD-32
Price: $5 to $7
Description: Children's shoes; canvas uppers and molded outsoles; UK children's sizes 11 to 3

Luckyy International

Model: CS-1
Price: $8 to $10
Description: Women's slip-on sandals; PU straps and heels, and PVC and rubber outsoles; UK sizes 2 to 6; with round stonework trimmings; in Mehndi green and silver

Madan Shoe Co.

Model: 5201
Description: Men's dress shoes; leather uppers and lining; rubber or PU outsoles; UK sizes 6 to 11; in black, beige and brown

Manjeet Plastic (India)

Model: England-Red-White
Delivery: 10 to 15 days
Price: $2.80
Description: Flip-flops; EVA insoles, rubber midsoles, and textured rubber and EVA outsoles; UK sizes 7 to 10

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This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade across Asia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.