The Union Government is ready to create a separate scheme to support the local ecosystem for manufacturing to substitute imports of raw material by the footwear industry.

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Terming the import of major components for footwear manufacturing primarily from one nation as a cause of concern due to strategic reasons, DPIIT's Additional Secretary Rajeev Singh Thakur told CNBC TV18 that the aim is to enhance local capabilities to manufacture non-leather footwear, which is 75 percent of India's total footwear market.

With yearly exports worth $5.5 billion & imports worth $1.5 billion, he described India's trade balance in footwear as not a major cause of concern as he pointed out that out of the scheme for leather footwear worth Rs. 1700 crores from FY 21 to 26, Rs. 1600 crores are already in place at the online portal.

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Even as DPIIT is addressing last mile issues between the BIS (Bureau Of Indian Standards) and industry on QCOs (Quality Control Orders) by filling gaps wherever needed, it is also treading cautiously to put in place an IMS (Import monitoring system) for leather footwear so as to not raise existing compliance burden on the industry.

Among the existing schemes, IDLS (Integrated Development of Leather sector) aims to reduce pollution with an outlay of Rs. 500 cr for 1000 units, as well as provide incentives or reimbursement for machinery to the footwear industry to use domestic machinery. The government is trying to ensure that Indian industry is able to produce domestic components identified via HSN codes while keeping sufficient margins.

Apart from requests for lower levy of GST on footwear, the industry has also been seeking a PLI scheme. Thakur said that the NITI Aayog, the Union Finance Ministry along with other stakeholders are screening demands while the government also actively considering proposals for PLI schemes for various sectors.

He added that the government wants to keep an egalitarian approach to approve proposals which are of high quality and generate high employment and is ready to tweak guidelines as and when needed.

The footwear, leather and accessories sector in India is valued at around Rs. 82,000 crores (US$ 11.5 bilion), with exports valued at around Rs. 42,000 crores (US$ 5.88 billion) contributing 2.65 percent of the global export in the sector.

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