US brands eye Indian leather footwear cos

Windfall a result of EU anti-dumping probe of Chinese, Vietnamese shoemakers

A European Union (EU) anti-dumping investigation of Chinese and Vietnamese shoemakers is likely to provide Indian companies with a windfall soon.

One of the outcomes of the ongoing EU investigation is that US companies, which source a lot of their shoes from China and Vietnam, have sent representatives to India to look for alternative supply sources.

Roughly, 30 per cent of US companies' branded footwear sales are in Europe, said Indian leather industry hands. Consequently, it has become necessary for them to locate alternative suppliers as the EU is expected to finally subject Chinese and Vietnamese products to anti-dumping duty, they added.

Recently, a US delegation under the umbrella of American Apparel and Footwear Association (AAFA) visited shoe factories in India. The aim of the delegation was to get a sense of the potential of the Indian industry to serve as an alternative supply base.

Fawn Evenson, vice-president of AAFA, told reporters here that India was an alternative supply destination that the US industry was looking at. The US footwear industry has almost completely outsourced manufacturing.

The US is the largest market for leather goods in the world. In 2003, the global leather and leather products market was valued at $ 88 billion. This market was dominated by footwear ($53 billion).

The US market alone accounts for half the world footwear trade, said a media release issued by the Commerce Ministry's Council for Leather Exports (CLE).

The Indian leather footwear makers were upbeat following the visit of the US delegation. Rafeeque Ahmed, chairman of CLE and head of Farida Shoes, told Business Standard that in the current situation the Indian industry was also looking at attracting Chinese footwear investments into India.

An Indian manufacturing unit would provide Chinese manufacturers with a long-term alternative base. To further that end, CLE plans to send a delegation to China in November to explore the possibility of attracting Chinese investment.

The recent developments have come at a time when the Indian leather footwear industry has become the engine of growth for leather exports.

In 2004-05, leather exports grew by 7.35 per cent to stand at $ 2.3 billion. Footwear exports were the largest contributor to the total and grew by 8.8 per cent to stand at $ 602 million.

Even in the current fiscal, leather footwear exports have been the main driver of exports growth.