The latest round of retaliatory tariffs introduced by US President Donald Trump is pushing global footwear brands like Nike, Adidas, and Puma to consider shifting more of their production to India. Experts say India, which now faces comparatively lower tariff rates than regional competitors, stands to benefit significantly from this shift.
On Thursday, the Trump administration implemented a 26% flat tariff on imports from India. While this marks an increase for Indian exports, it still places India in a more favorable position than competitors such as:
Vietnam: 46%
Cambodia: 49%
Bangladesh: 37%
Indonesia: 32%
These steeper tariffs make goods from these countries significantly more expensive in the US market.
Shares of leading sportswear companies were hit hard following the announcement:
Nike shares plunged 10%, hitting their lowest point since 2017.
Adidas declined 11%.
Puma dropped 10%.
According to UBS analysts cited by Reuters, US retailers may need to raise sneaker prices by 10–12% to offset higher costs from countries like Vietnam.
Vietnam has been a manufacturing hub for global footwear brands, with:
50% of Nike’s footwear manufactured in Vietnam.
39% of Adidas’ footwear also sourced from Vietnam.
However, the new tariff structure could push Vietnamese non-leather footwear duties up to 60% in some categories, compared to India’s revised rate of around 36%.
As part of the global "China+1" strategy, brands had already begun shifting manufacturing to India. The new tariffs are expected to accelerate this trend, especially in Tamil Nadu — a growing hub for non-leather footwear.
India’s non-leather footwear exports previously faced 10–12% duties in the US. The new structure makes India a more cost-effective choice for brands seeking to reduce production expenses.
Tamil Nadu is emerging as a key center for global footwear production. Major developments include:
Taiwanese contract manufacturers like Feng Tay, Shoe Town, Pou Chen Corp, and Hong Fu investing over ₹18,000 crore in the state.
JR One Kothari’s factory in Perambalur, a JV between KICL and Shoe Town Group, has produced over 2 million Crocs since launching in November.
KICL’s MoU with Tamil Nadu to invest ₹5,000 crore in manufacturing Adidas shoes.
India also offers a significant cost advantage in labor:
India: $0.90/hour
China: $3/hour
Vietnam: $2/hour
Indonesia: $1.50/hour
An industry expert noted, “Brands can pass on at most a 10–12% price hike to consumers, but these tariffs are too steep. Cutting production costs is the only viable path, and India stands to gain.”
Conclusion: India Poised for a Footwear Manufacturing Boom
With favorable tariffs, competitive labor costs, and growing infrastructure, India is set to become a key player in global footwear manufacturing. The latest US tariff policy may be the catalyst that accelerates India’s rise in the non-leather footwear export sector.