New Delhi: Industry players and exporters of footwear have urged the government to immediately extend the implementation of the quality control order (QCO) by 12 months as the businesses are not yet prepared to follow the norms. According to the ‘Footwear Made from Leather and Other Materials (Quality Control) Order, 2022′, which will come into force from July 1, manufacturers have to modify their processes to comply with the new standards.
This includes establishing testing laboratories, obtaining BIS licences, and adhering to the rules for issuing the ISI mark.
Economic think tank GTRI said that these changes require time and investment, and most manufacturers may be unable to meet the timelines.
Global Trade Research Initiative (GTRI) co-founder Ajay Srivastava said there is a need for the government to provide clarity on the selling of existing stock.
“QCO provides no guidelines on using existing stock post application of QCO. Leather is a long-lasting item; many retailers store shoes for 2-3 years. Since it will be difficult to segregate inventory, the QCO may be applied to retailers after 12-24 months,” he suggested in a report.
An industry expert too said that the government should exempt footwear above a certain price band from this quality order.
“In India, the average price of imported footwear is around USD 10 per pair. This is based on the import data of last three years. It is therefore logical to assume that CIF (cost, insurance, freight) price per pair of majority of footwear imported in India is well below USD 20 per pair. Therefore, we are seeking exemption for footwear of more than USD 40 per pair,” the expert said.
Providing this exemption will not harm the interest of local manufacturers and at the same time allow import of hig-end products, which are of high quality, he said.
GTRI further suggested seven measures for rapid growth of India’s footwear production and exports and it included evaluating the impact of QCO on small firms, focus on non-leather shoes,check on low-priced imports, and manage imports from countries having trade pacts with India.
It added that setting up of testing and certification facilities before applying for the BIS registration and certification process takes time and money as existing facilities are insufficient to cater to the current requirements.
“80 per cent of shoe-making units are cottage or tiny scale. For WTO (World Trade Organization) compatibility, QCO must apply to all units. Most will not meet the requirements and shut the shop,” it said.
Footwear in India is mainly imported from China, Vietnam, Indonesia, and Bangladesh. China is the largest supplier, with a 38.2 per cent share in India’s imports.
Imports from Vietnam rose fast, from USD 76.6 million in 2017 to USD 267.3 million in 2022.
“India imports about 25 per cent of shoes at less than USD 3 per pair. Such low-priced imports can be curbed by charging the applicable 35 per cent basic customs duty @ the minimum import price of USD 5 per pair,” it said.
The industry provides jobs to about 4.42 million people; women’s employment is predominant, with about 40 per cent share.
“A well-timed and effective QCO, investment in high quality and scale production facilities for non-leather shoes and a heart to protect small firms will take the sector to new heights,” the report said.