Bahadurgarh: Talking to The Financial World, Narendra Chikkara, Senior Vice President Bahadurgarh Footwear Park Association said if GST is reduced, the footwear industry will pick up pace, and the industry owners hope for relief in the 2025-26 budget. He said that earlier footwear up to Rs 1,000 was tax free. Now 12 percent GST has to be paid. and the industry is demanding to reduce the GST rate to 5 percent so that the demand for footwear can increase again. He said the footwear industry which was running fast along with the Indian economy has now slowed down, the reason for this is the increase in GST rate, which is creating obstacles in the path of the footwear industry which provides maximum employment has declined by 30 percent due to lack of government support and less duty draw back.
The present scenario of Bahadurgarh non-leather footwear industry reveals that there are nearly 2500 manufacturing units in the town manufacturing about 80 lakh pairs of footwears daily, having annual total turnover of Rs 50 thousand crores which include the export of footwear about Rs 3.5 thousand crores having nearly 50% share of export of footwears in the country and the industry providing employment to nearly 2,5 lakh persons. Chikkara said if the government gives incentives and increases the duty draw back from 1.5 percent to 6 percent, then the exports here will reach Rs. 10 thousand crores annually. He said, the duty drawback on footwear in China is 12 percent, due to this the goods from there are being exported to other countries. Chikkara said, apart from this, 40 percent duty is levied on footwear components imported from China, which should be reduced to 5 percent. He said, now this industry is running in loss, if entrepreneurs are to be believed, the sale of footwear here has declined in the last three years.
Subhash Jagga Malik, President of Bahadurgarh Chamber of Commerce & Industry said there was a time when 80 percent of footwear in the country was being imported from China. With the construction of a footwear park in Bahadurgarh, not only did imports from China come down to two percent, but exports also started. “This was possible when footwear of price worth up to one thousand rupees was made tax free. At that time, the footwear industry of Bahadurgarh had taken off a lot and every small and big unit came into the mainstream. But the footwear industry suffered a major setback due to the increase in GST. Footwear entrepreneurs had also met Finance Minister Nirmala Sitharaman and demanded reduction in GST rates, but the demand has not been met,” Chikkara said.
Nearly a thousand more factories are waiting to set up industries in Bahadurgarh Footwear Park. Most of the factories in Bahadurgarh come under Micro Small Manufacturers Enterprise. The government has made the payment period for goods purchased from MSME to 45 days, due to this, traders are stopping to buy goods from MSME. The entrepreneurs demand payment period for MSME should be made from 90 to 120 days, also, if the government provides land on lease or at cheap rates on the lines of Andhra Pradesh and Tamil Nadu, then one thousand more factories can be set up in Bahadurgarh in a short time.
