The excise duty of the footwear parts falling under chapter 64 has been reduced to 8% from 16%.

However, the industry had requested for the reduction in customs duty on the natural rubber in other forms to 10% from 20% with the view to remove the anomaly in the duty structure.

Further, the industry had made requisition for appropriate provision whereby footwear exporters can procure the same inputs from the domestic manufacturers out of the 3% of FOB value of exports, without the payment of the applicable duties. As per the sl. no.167A of customs notification no. 21/2002, the exporters are allowed to import specified inputs without paying the customs duty and the CVD of 3% on the FOB value of exports achieved in the preceding financial year.

The budget proposal had not addressed the anomaly in the duty structure of the industry nor made any provision as expected by the industry. The excise duty reduction would encourage the indigenous footwear component manufacturers. But there was nothing much on offer for organized footwear manufacturers. On the whole the budget outlook for the industry is neutral with a negative bias.