Leather and Footwear in India
Competing with China and Vietnam in Shoes
Why China and Vietnam dominate global footwear exports, what India's disadvantages are, and how trade agreements and investment could help India compete.
China and Vietnam dominate world footwear exports.
Their shares
- China makes over half of the world’s shoes.
- Vietnam is the second-largest exporter, making shoes for Nike, Adidas and others.
Their advantages
- Scale: huge factories with thousands of workers.
- Supply chains: materials and components nearby.
- Trade deals: Vietnam’s agreements with the EU and others give tariff advantages.
- Foreign investment from Taiwanese and Korean suppliers.
India’s disadvantages
- Small units.
- Input costs.
- Labour rules historically discouraging large factories.
- Logistics.
India’s opportunities
- Trade deals: agreements with the UAE, Australia, the UK and EFTA cut tariffs for Indian footwear.
- China+1: brands diversifying.
- Domestic market scale.
Lesson
Winning in labour-intensive exports needs scale, inputs and market access.
The tariff edge
Under a new trade deal, Indian leather shoes enter the UK duty-free, helping Indian exporters compete with Vietnam.
Thinking large production means large exports
India produces a lot but exports far less than China and Vietnam.
Key takeaways
- China makes over half of the world's shoes.
- Vietnam is the second-largest exporter.
- Scale, supply chains and trade deals give them advantages.
- New trade deals and China+1 offer India opportunities.
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