The government has provided a boost to the footwear and leather sector in the budget, but experts emphasise that its success hinges on effective implementation
As India aims to become a global leader and a developed nation by 2047, it is essential to strengthen efforts to promote employment and entrepreneurship in labour-intensive sectors. Recognising the steady growth of the footwear and leather industry, Finance Minister Nirmala Sitharaman has sought to enhance its productivity by introducing significant incentives in the Union Budget for the financial year 2025-26 (FY26).
Aimed at enhancing the productivity, quality and competitiveness of India’s footwear and leather sector, the Finance Minister revealed that a focus product scheme will be implemented. The scheme will support design capacity, component manufacturing, and machinery required for the production of non-leather quality footwear, besides the support for leather footwear and products. While the experts and industry leaders have welcomed the step as promising, they also have remarked that the success hinges on careful implementation.
Employment, Turnover, Exports
With the focus being directed towards positioning India as a global manufacturing hub, the scheme not only aims to boost production but also enhances the country’s competitive edge in international markets. Sitharaman stated that the scheme is expected to facilitate employment for 22 lakh persons, generate a turnover of four lakh crore and exports of over 1.1 lakh crore.
“The announcement of the focus product scheme for the footwear and leather industry in the Union Budget 2025 is a significant step towards positioning India as a global manufacturing hub. With the government targeting an increase in exports to over Rs 1.1 lakh crore and the potential to create 2.2 million jobs, this initiative not only aims to boost production but also enhances our competitive edge in international markets,” stated Mukul Goyal, Co-founder of Stratefix Consulting.
Addressing The Gaps
By providing support for design capacity, component manufacturing, and machinery for non-leather quality footwear, the scheme addresses critical gaps that have historically hindered growth in this sector, as per the experts. Goyal added that this is particularly vital as we see a growing global demand for sustainable and high-quality products.
With the sector currently generating approximately USD 4.69 billion in exports, this initiative aims to significantly boost our export capabilities and turnover, targeting an ambitious growth to USD 5.3 billion this fiscal year alone, he highlighted.
Unlocking Potential For Ecommerce
Experts have highlighted that the benefits of the scheme will trickle down to the ecommerce ecosystem as well. By driving deeper supply chains, stronger micro, small and medium enterprise (MSME) participation and a more seamless cross-border direct-to-consumer (D2C) play, the initiative will aid the overall growth.
“For ecommerce too, this unlocks massive potential. With India’s online footwear sector already growing at 30 per cent annually, this move will drive deeper supply chains, stronger MSME participation, and a more seamless cross-border D2C play. Leather footwear—our forte—now has the momentum to dominate global markets, while homegrown brands have the backing to scale beyond borders,” highlighted Chirag Taneja, Founder and Chief Executive Officer (CEO), GoKwik.
Taneja added that the global ecommerce footwear market is projected to hit USD 225 billion by 2033. He stated that India has the talent, the demand, and now, the policy support to move from being just a manufacturing hub to a brand powerhouse.
“Increasing the investment and turnover limits for MSME classification is a game-changer that will drive scale, innovation, and job creation. The big boost for sectors such as toys, footwear and many others will lead to improved domestic capabilities in manufacturing and exports,” highlighted Dhiresh Bansal, Chief Financial Officer (CFO) at Meesho.
Need For Careful Implementation
While the Centre’s initiatives for the footwear and leather sectors are promising, the experts have warned that their success hinges on careful implementation. As the market for non-leather footwear grows, India must align with global sustainability trends to remain competitive.
“Exempting Basic Customs Duty (BCD) on Wet Blue leather and export duties on Crust Leather can reduce costs and drive export growth but India needs strategic investments in infrastructure and technology to fully capitalise on this advantage. The goal of creating 22 lakh jobs is ambitious, yet to be impactful, we must focus on upskilling the workforce to meet global standards,” stated Shiraz Askari, President, Apollo Fashion International.
While noting that this initiative will catalyse innovation and operational efficiency within the industry, it becomes essential for businesses to leverage this opportunity by investing in technology and skills development. If the Centre cracks the implementation code, Indian footwear is ready to step onto the world stage with force truly taking in Make in India for the world.
