US Tariffs Could Drive Footwear Manufacturing Boom in India

In a bold move, US President Donald Trump has introduced sweeping new import tariffs, triggering a shift in global manufacturing dynamics. The latest trade policy includes a flat 26% duty on imports from India, with limited exemptions. However, what’s turning heads in the global footwear industry is that India’s regional rivals—Vietnam (46%), Cambodia (49%), Bangladesh (37%), and Indonesia (32%)—are now subject to much higher tariffs.

Sharp Market Reaction Hits Global Brands

The impact was almost immediate. Shares of major global footwear brands took a sharp hit following the tariff announcement—Nike's stock dropped by 10%, marking its lowest point since 2017, while Adidas fell 11% and Puma slipped 10%. As per a Reuters report quoting UBS analysts, sneaker prices manufactured in Vietnam could rise by 10–12% in the US as companies attempt to compensate for the increased tariff burden.

Vietnam’s Loss is India’s Gain

Currently, 50% of Nike’s global footwear production is sourced from Vietnam, while 39% of Adidas’ footwear originates from there. With Vietnam facing new tariffs of up to 60% on non-leather footwear, India emerges as a more favorable option. Even under the revised structure, India’s expected tariff of around 36% makes it a relatively cost-effective destination.

"Over the last decade, Nike, Adidas, and Puma placed big bets on Vietnam. With the latest tariff hikes, India—particularly Tamil Nadu—is emerging as the next major hub for manufacturing," said an industry executive.

Tamil Nadu: The Footwear Capital in the Making

India has already been part of the China+1 manufacturing strategy adopted by global brands. Now, with a favorable tariff regime, Tamil Nadu is set to become a key non-leather footwear manufacturing hub. The state is currently home to major production units for brands like Nike, Puma, Crocs, Adidas, and Reebok.

Non-leather footwear accounts for 86% of global usage. Taiwanese contract manufacturers such as Pou Chen Corp, Shoe Town, Feng Tay, and Hong Fu are already investing in Tamil Nadu, with a total commitment of about ₹18,000 crore.

Significant Local Investments Already Underway

The JR One Kothari factory in Perambalur, Tamil Nadu—a joint venture between Kothari Industrial Corp. Ltd (KICL) and Taiwan's Shoe Town Group—has already begun production. Since its opening in November, the facility has manufactured over 2 million Crocs pairs for both domestic and international markets.

Additionally, KICL has signed a Memorandum of Understanding with the Tamil Nadu government for a ₹5000 crore investment to produce Adidas shoes locally.

"As an industrialist and foreign collaborator, I believe this tariff shift will drive more investment into India," said J Rafiq Ahmed, executive chairman of KICL.

Competitive Wages Make India Attractive

An added advantage for India lies in its lower labor costs. The average hourly wage in India stands at $0.90, significantly cheaper than China ($3), Vietnam ($2), and Indonesia ($1.50).

"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 if companies move in that direction," said an industry expert.

Conclusion

The United States' latest tariff overhaul under President Trump is poised to reshape the global supply chain for non-leather footwear. While nations like Vietnam and China bear the brunt of heavy import duties, India finds itself in a comparatively advantageous position.

With a more favorable tariff structure, rising infrastructure capacity, and significantly lower labor costs, India—especially Tamil Nadu—is becoming an attractive destination for global footwear brands like Nike, Adidas, and Puma. Investments from Taiwanese manufacturing giants and domestic players like KICL further underscore this momentum.

As global brands seek to minimize supply chain risks and control production costs, the shift to India seems not only strategic but inevitable. This development could mark a significant leap in India's journey to becoming a global footwear manufacturing powerhouse, aligning perfectly with the country's Make in India and China+1 policies.