Global brands such as Nike, Tommy Hilfiger, Calvin Klein, Armani Exchange, Superdry and Woodland may soon resume importing premium footwear to India, as the government has started certifying overseas shoe factories after almost 18 months, industry executives said.
Chief executives of three large brands said the government finally initiated the move for two key reasons – US President Donald Trump highlighting India’s import barriers on US brands and a slump in premium range sales due to supply issues.
India introduced new quality control orders (QCOs) for leather shoes in July 2023 and for other footwear such as sports shoes, sandals, clogs and slippers in August last year. These require shoemakers to source products only from Bureau of Indian Standards (BIS)-certified factories, whether in India or overseas. However, the certification process for overseas factories did not take off as the government wanted to curb imports and build local manufacturing, leading to a stock shortage in the premium segment, executives said.
A government official confirmed that BIS has started the approval process, as was directed by senior officials.
China Out of Equation
The process for each factory will take two to three months since it undertakes quality audits, the official said.
However, factories in China and those owned by the Chinese in other markets are still out of the approval process, said people in the know. BIS is ready to approve factories in Malaysia, Thailand, Vietnam, Bangladesh and elsewhere, industry executives said.
“The companies have been asked to give the details of their suppliers,” said the government official cited above. “Chinese suppliers are unlikely to receive any approval,” he added.
US-headquartered Nike Inc, which is dependent on imports for its India operations, had made multiple representations to the Indian government for BIS approval of its global suppliers with no success, industry executives said. Finally, it raised the issue with the US government ahead of Prime Minister Narendra Modi’s meeting with Trump earlier this month, which helped.
The industry also lobbied hard, citing a sales slump at the top end of the market despite high demand when the country is trying to improve consumption, executives said. They argued that India does not yet have the capability to manufacture sophisticated premium shoes that require high-end machinery and skills, and that existing capacity is not sufficient to meet domestic demand.
“While the footwear industry…has shifted some production to India, including by us, for non-leather premium shoes, capabilities are still limited,” said Harkirat Singh, managing director of Woodland.
Supply Troubles
Footwear imports into the country decreased to $299.76 million in calendar 2023 from $920.34 million in 2022.
Emails sent to BIS, Nike Inc and Reliance Retail, which sells Armani Exchange and Superdry in India, remained unanswered “BIS officials have started visiting overseas shoe factories from this month,” the Indian chief executive of a large global brand told ET.
“We lost over six to eight months of business with practically no stock.” BIS has so far inspected one overseas supplier factory of the brand, the CEO said.
Shailesh Chaturvedi, chief executive of Arvind Fashions, said its footwear growth was affected because of delay in certification of factories. The company sells brands such as US Polo and Tommy Hilfiger in India.
“Footwear is a large business for us, and we are looking at strong leadership,” Chaturvedi told analysts earlier this month. “Now, because of the government regulation…, the import of footwear has come to a standstill. So, in some of our big brands like US Polo and in Tommy Hilfiger, we saw a sharp decline in business.”
Chaturvedi said this issue should be over in six months, with some of the factories in the process of getting approved and more production in India. “So, I would say the worst is behind us… In the last nine months, we did lose business in footwear because of the lack of inventory, but things are looking up,” he said.
The government has also regulated imports of toys and electronic goods like televisions, air-conditioners, smartphones and lighting products-particularly from China-with higher import duties, import licensing and making BIS approvals mandatory. This has prompted several companies to shift production of these products to India.
