The delay in obtaining approvals from the Bureau of Indian Standards (BIS) for sourcing units in China and Vietnam is causing significant disruptions for several imported shoe brands, including Armani Exchange, Superdry, Calvin Klein, Tommy Hilfiger, and US Polo Assn. The BIS Quality Control Orders (QCO), which took effect for leather shoes in July 2023 and will be applicable for sports shoes, sandals, and slippers from January 2024, require these brands to obtain certification for their manufacturing units abroad.
Impact on the Footwear Market
The delay in BIS certifications has led to potential shortages of new spring-summer collections, affecting the premium footwear market that relies heavily on imported designer and luxury labels. The certifications are crucial for factories producing key components like rubber and polyurethane soles, primarily sourced from China and Vietnam​.
Government Stance and Industry Response
The Indian government aims to promote domestic manufacturing by reducing dependency on imports, especially from China. This push aligns with the broader “Make in India” initiative, seeking to enhance local production capabilities. However, executives from major brands have expressed concerns over the slow pace of certifications and the challenges in shifting production to other countries or local facilities, which might not yet have the expertise for high-end footwear manufacturing​.
Alternatives and Future Prospects
Some brands are exploring importing from Europe despite higher costs, while others are considering establishing manufacturing units in India. Nike, for instance, has requested the government to expedite certifications for its factories in Vietnam and Indonesia to avoid disruptions.
The BIS nod delay is causing significant challenges for imported shoe brands in India, potentially leading to market shortages and increased prices. The push towards local manufacturing, while beneficial in the long term, presents immediate hurdles for brands accustomed to established international supply chains. The industry must adapt to these changes, balancing regulatory compliance with market demands.
The delay in obtaining approvals from the Bureau of Indian Standards (BIS) for sourcing units in countries like China and Vietnam is significantly affecting imported shoe brands in India. These brands, including Armani Exchange, Superdry, Calvin Klein, Tommy Hilfiger, and US Polo Assn, are facing potential market shortages and increased prices due to these regulatory challenges.
Supply Chain Disruption
The BIS Quality Control Orders, in effect for leather shoes since July 2023 and extending to sports shoes, sandals, and slippers from January 2024, require foreign manufacturing units to secure BIS certification. The delays in these certifications are causing significant disruptions. Factories in China and Vietnam, key suppliers of these brands, have not yet received the necessary approvals, leading to concerns over inventory shortages and price hikes​.
Push Towards Local Manufacturing
The Indian government’s initiative to promote local manufacturing aims to reduce the country’s dependency on imports, particularly from China. This aligns with the broader “Make in India” strategy, encouraging domestic production and boosting the local economy. However, this transition is fraught with immediate challenges. Domestic manufacturing facilities currently lack the expertise to produce high-end, designer, and technical footwear that matches the quality of imported products​.
Industry Response and Alternatives
To mitigate the impact of the BIS nod delays, some brands are considering alternatives such as importing from Europe or shifting production to India. However, these solutions come with their own set of challenges. Importing from Europe involves higher manufacturing and freight costs, which could lead to increased retail prices. On the other hand, establishing manufacturing units in India requires significant investment and time to develop the necessary expertise and infrastructure​.
