Leather and Footwear in India
Incentives for Footwear Manufacturing
How India's 2025 Budget announced a focus scheme for footwear and leather, state policies in Tamil Nadu, and whether incentives can build scale.
Governments are trying to boost footwear manufacturing.
2025 Budget
- The 2025-26 Union Budget announced a Focus Product Scheme for footwear and leather.
- Goals: support design, components and non-leather footwear, aiming to create over 2 million jobs and raise exports.
Tamil Nadu
- Tamil Nadu’s footwear and leather products policy (2022) offers incentives for large factories.
- It attracted Taiwanese and other suppliers.
Earlier schemes
- The Indian Footwear, Leather and Accessories Development Programme supported technology upgrades and clusters.
Why target footwear
- Labour-intensive: many jobs per rupee.
- Women make up a large share of workers.
- Export potential.
Challenges
- Input duties on synthetics.
- Labour laws and land.
- Competition with established exporters.
Lesson
Incentives work best with input access, infrastructure and trade deals.
The mega factory
A footwear maker opens a factory employing 10,000 workers in Tamil Nadu, attracted by state incentives and trained workers.
Thinking incentives alone build industries
Inputs, infrastructure and trade access also matter.
Key takeaways
- The 2025 Budget announced a footwear and leather focus scheme.
- It aims for over 2 million jobs.
- Tamil Nadu's policy attracted large factories.
- Inputs and trade access also matter.
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