Twenty-two-year old Madhura Dasgupta says the mundane Budget speech playing in the backdrop at her house on Saturday only caught her attention when the Finance Minister mentioned an excise duty cut on shoes. “I love buying shoes and the minute the Finance Minister said there is going to be a cut in excise duty on leather footwear I got excited. I am not sure if it would mean any substantial price cuts but even if it means small savings I’ll look forward to it,” said Dasgupta, who is based in Delhi and started working as an HR professional just five months ago. Consumers such as Dasgupta will, however, need to wait before they can buy cheaper leather shoes. So even though the FM said excise duty on leather footwear of retail sales price of more than ₹1,000 per pair is being reduced from 12 per cent to 6 per cent leather footwear makers say it will take time before this benefit can be passed on.

Adesh Gupta, CEO, Liberty Shoes, said prices of leather footwear are expected to go down 3-5 per cent. “But it will be very difficult to change prices immediately and so companies will only be able to introduce these prices when they introduce new stocks which could typically mean in the next 2-3 months,” he said.

Boost volume, growth

Rajat Wahi, Partner and Head of Retail Sector, KPMG in India, said this move would boost both volume and value growth of the leather footwear industry.

Premium leather brands such as Lee Cooper say they are expecting to get a manufacturing boost.

Harkirat Singh, Managing Director, Woodland, also said, prices of leather footwear will go down by 3-4 per cent and is likely to reflect in the next few months. “We will expand capacity of our plants by 30 per cent and rely less on imports from countries like Italy and Spain for our range of leather footwear,” he said, adding that leather footwear comprises nearly 60 per cent of Woodland’s ₹1,000-crore sales turnover. In fact, leather footwear makers point out that men may end up benefiting more from this move to cut excise duty. Asif Merchant, Managing Director, Catwalk Shoes, said, “It is the men’s brands using leather uppers which will benefit the most from the duty reduction.’’

Rafique Mallik, Chairman, Metro Shoes, said, said, “The drop in duties is for shoes with leather uppers and would primarily benefit brands in the premium category.”

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