India misses out in footwear, leather exports as China goes high-tech

Once the world's low-cost manufacturing powerhouse, China began a strategic shift towards high-tech and clean energy sectors in 2015. This transition opened a significant opportunity for other economies to capitalize on labour-intensive industries like textiles and footwear. However, India, despite its potential, has struggled to fully seize this moment.

A recent World Bank report highlights India's missed opportunity. The country's share of global apparel exports declined from 4 per cent in 2018 to 3 per cent in 2022, primarily due to escalating production costs and decreasing productivity. This trend mirrors India's broader export performance, with merchandise exports falling in the fiscal year ending March 2024, with merchandise exports falling to $437.06 billion in the fiscal year 2024, down from $451.07 billion the previous year, according to data from the Ministry of Commerce and Industry.

As China scaled back its production of textiles, footwear, and leather, expectations were high that lower-cost countries like India would fill the void. While India has taken steps towards trade liberalization, challenges persist. The World Bank's India Development Report underscores the need for cost reduction, lower trade barriers, and deeper international integration to compete effectively in the global market. The report also emphasizes the importance of including key sectors like digital trade in future trade agreements to maximize their impact.