Footwear imports outweigh exportsWhile imports of footwear has been growing at a fast pace, export numbers are stagnating, as the burgeoning middle class of Nepal today are preferring foreign goods to domestic goods, say traders.
Published at : November 20, 2018
Updated at : November 20, 2018 08:46
While imports of footwear has been growing at a fast pace, export numbers are stagnating, as the burgeoning middle class of Nepal today are preferring foreign goods to domestic goods, say traders.
In the last fiscal year 2017-18, Nepal imported Rs4.03 billion worth of footwear, up 25 percent in comparison to the previous fiscal year, according to the statistics of Department of Customs.
The country exported footwear worth Rs1.28 billion in the last fiscal year, which is similar to last fiscal year’s export, when the country exported footwear worth Rs1.24 billion.
Statistics show that footwear imports jumped Rs2.35 billion in first three months of the current fiscal year 2018-19. The country exported footwear worth Rs250.23 million in the same period.
“Despite having huge potential to make the country self-reliant on footwear, we are not seeing the desired demand from customers. And imports are expected to grow more in the coming years. It’s because domestic manufacturers have not been able to operate in full capacity,” said Krishna Kumar Phuyal, senior vice president of Footwear Manufacturers Association of Nepal. He claimed that domestic production has been fulfilling only 50 percent of the total demand.
Most of Nepal’s production is largely exported to India. According to statistics, export of sports shoes, particularly Goldstar shoes, amounted to Rs241.34 million to India in the first three months of current fiscal year.
Beside India, Nepal has also been exporting footwear to countries like the US, the UK, Denmark, Switzerland, Germany, Japan, Australia and Bhutan.
China and India are major footwear exporters to Nepal, and shoes are also imported from Thailand, Vietnam and Indonesia. Nepal has been importing sports and leather shoes majorly from China. The country imported ladies’ footwear worth Rs1.03 billion in the last fiscal year.
According to the association, there are around 1,501 footwear manufacturing companies in Nepal, investing around Rs45 billion in the market.
Phuyal said that the demand for footwear stands at 80 million pairs annually in the country. Of the total demand, domestic companies produce 40 million pairs of footwear. “The footwear industry has been providing employment to 50,000 people directly,” said Phuyal.
He said that domestic footwear is not being able to compete with international brands as Nepali manufacturers depend on a more traditional manufacturing process. “There is a need to adopt advance technology so that Nepali made shoes appeal domestic as well as international buyers.”
There are a large number of footwear companies but they all depend on imported raw materials. The country has been importing 70-75 percent of raw materials from India, said Phuyal.