India plans to raise import duties on shoes from China

India plans to raise import duties on shoes from China

An increase in imports of leather goods and shoes from China is alarming for India’s leather industry amid a decline in exports of leather goods and shoes from India. While China is a major exporter of raw leather to India, India is an importer of shoes and other leather goods such as handbags, saddles and harnesses.
Footwear is India’s main import from China, accounting for about 68% of the total import of Indian footwear. Imports of leather, leather goods and footwear from China are estimated to account for 91 per cent of the added value of its leather products.
“In terms of leather and footwear, the current trading environment is in China’s favour, even though India’s trade deficit with China fell by $10bn last year to $53bn,” an official familiar with the matter said at a recent meeting of the ministry of commerce and various industry groups to discuss narrowing the trade deficit.
From April 2018 to January 2019, India imported us $353.3 million worth of footwear and us $321.6 million worth of leather goods from China. But shoes and leather goods were exported to China for $34.1 million and $21.3 million respectively, with India exporting most of its raw leather to China.”The ministry of industry and commerce is reviewing the issues we raised,” said a leather industry representative who attended the meeting. Because of the shoe trade deficit, we asked the government to raise the import tariff on Chinese shoes from 25% to 35%.
According to the asia-pacific trade agreement, China imposes a tariff of 5-7% on imported leather from cattle, 5.6% on finished leather from sheep or lamb, and 9.8% on finished leather from goats. In the future, China’s import tariff on finished leather is expected to drop to zero, because, as one of the Allies, India’s import tariff on finished leather is zero.
China is the world’s fifth largest importer of leather and leather goods. Its imports of leather and leather goods increased from us $7.7 billion in 2013 to us $8.8 billion in 2017, with a compound annual growth rate of 3.39%.
Indian commerce minister Suresh Prabhu has said India should not only keep a trade balance with China, but also maintain a trade surplus.

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