Government plans to raise customs duty on footwear imports

By

Isabelle Crossley

Published
Feb 3, 2020

The upcoming government budget plans to increase customs duty on footwear, with India's Minister of Finance, Nirmala Sitharaman, arguing this will aid Indian micro, small, and medium sized enterprises.

 
Finance Minster Sitharaman believes that increasing import duties on footwear will help to prevent a surge in imports, which she said can damage the respective domestic industry, ET Retail reported. As the government continues to promote domestic production to grow India’s economy, it hopes that increasing customs duties on footwear will encourage brands to manufacture footwear in India, instead of importing it. 
 
Increasing domestic production would create jobs and grow India’s footwear industry. The move is also intended to benefit MSMEs, which the Union Government has championed as the sector which will lead the next phase of growth in the country.

"Labor-intensive sectors in MSME are critical for employment generation,” said Sitharaman in her budget speech on February 1, ET Retail reported.

“Cheap and low-quality imports are an impediment to their growth. Special attention has been taken to put measured restraint on the import of those items, which are being produced by our MSMEs with better quality. Keeping in view the need for this sector, customs duty is being raised on items like footwear and furniture."
 
"It has been observed that imports under Free Trade Agreements are on the rise,” said Sitharaman.

“Undue claims of FTA [free trade agreement] benefits have posed a threat to the domestic industry. Such imports require stringent checks. In this context, suitable provisions are being incorporated in the Customs Act. In the coming months, we shall review Rules of Origin requirements, particularly for certain sensitive items, so as ensure that FTAs are aligned to the conscious direction of our policy."