Soon ago, the footwear market in Agra found healthy growth as a result of high demand and powerful revenue in both the global and domestic markets. About a year ago, little and mid-sized footwear producers and suppliers found substantial need for equally men's and women's footwear from customers in the US, Europe and West Asia. However, this circumstance has changed considerably over the past few months.
Lately, there is a considerable decline in revenue, which includes consequently had a negative impact on margins. It's triggered remarkable force for the Agra footwear business that's preventing to remain afloat. A market, which after noted a 27% development charge, is currently struggling to keep up its past growth levels.
"The export profits have dropped considerably since the last financial year as requests from european Market place are quickly diminishing. A large amount of small-scale products, which produced extravagant shoes for global consumers, are now actually turning store because of decreasing sales in export areas," claims RK Khindri, Supervisor and Coordinator, Agra Footwear Suppliers and Exporters Step (AFMEC).
Furthermore, this season, the Agra footwear business has observed a drop in need in key domestic areas like Delhi, Mumbai and Pune as well. The industry has seen more than a 30% drop in requests from January to March, that year. With the need having slumped significantly, 1000s of skilled footwear labourers and experts across the city have lost their jobs.Besides shrinking export sizes, Agra footwear production products also have confronted the adverse influences of delayed payments and not enough infrastructural facilities.
On one other hand, footwear manufacturing units located in well-developed regions like Noida and Chandigarh have entry to higher infrastructural facilities. That facilitates creation of top quality shoes at a cheaper, thus garnering the respect of both domestic and offshore buyers. This in turn, has hampered the business enterprise of small Agra footwear units, as majority of the requests are now shifted to products located in parts like Delhi, Noida and Chandigarh.
Limited bank credit has more included with the financial predicament of small-scale footwear traders in Agra. "Regardless of the directives issued by the Reserve Bank of India (RBI), banks are unwilling to provide to SME units. They are turning down loan-against-inventory demands and are now challenging collaterals, which nearly all of footwear items are unable to provide. Subsequently, small footwear companies have started to resort to cost-cutting measures such as lay offs, which ultimately cause under utilisation of the creation sizes," claims Kuldeep Singh, Proprietor, Aryman Footwear Exports.Given the existing circumstance, little footwear models are banking on government support, infrastructural reforms and aid from financial institutions in order to cure their recent loss.