US tax hike..!? Nike and Adidas companies turn to India..!!?

World-renowned footwear companies like Nike, Adidas, Puma, etc. are rapidly moving forward with plans to shift their production centers to India. The main reason for this is considered to be US President Donald Trump's new tax hikes. The US is the world's largest market and has a large consumer base. It is currently encouraging local production by imposing high taxes on shoes imported from other countries. Nike, Adidas - World-famous footwear companies: As a result, world-famous footwear companies like Nike, and Adidas are planning to shift their production centers towards India. There are many main reasons for this. The first reason is that the labor cost of workers in india is very low. In addition, the working conditions of workers are reformed and acceptable.
Moreover, india has made great progress in productivity. Especially in tamil Nadu, the presence of excellent factories for footwear production and the basic facilities for it is the main reason that is attracting these companies towards tamil Nadu. workers in india earn up to $0.90 per piece. This is $3 in china, $2 in vietnam and $1.5 in Indonesia. Therefore, india is a very suitable place to reduce production costs. The footwear factory jointly established by JR Kothari Company and Taiwan's Shoe Town Group in Perambalur district of tamil Nadu is currently producing 2 million Crocs shoes per year. Moreover, a plan to invest Rs. 5000 crore to manufacture Adidas shoes in partnership with the tamil Nadu government has also been announced.

USA - New tax rates: The new tax rates announced by the USA have had a major impact on the global footwear market. It has been said that up to 60% tax will be imposed on shoes manufactured in Vietnam. Similarly, up to 36% tax will be imposed on shoes manufactured in India. Meanwhile, an additional 34% tax has been added to the existing 20% tax on China. Due to these high tax rates, many important global companies are coming forward to make india their main manufacturing center instead of china under the production plan called the 'China +1 strategy'.

Employment and growth opportunities: With this new situation, job opportunities are likely to increase significantly in india, especially in tamil Nadu. Already, famous companies like Nike, Adidas, Puma, and Crocs are expanding their manufacturing operations in tamil Nadu.
India taking advantage of recent changes: India's footwear exports have grown in the last few years. In the last financial year, india was exporting footwear to the US at a tax rate of 10-12%. But in the current situation, India's competitors like vietnam, Cambodia, and bangladesh are forced to face taxes ranging from 46% to 60%. This has created a huge market opportunity for India.

Even if tariffs continue to increase between countries, india will have a greater chance of progressing due to its industrial development. It is certain that India's contribution to the footwear manufacturing sector is going to increase. Through this, employment, investment, and growth will give new impetus to the indian economy.
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US tax hike

Sowmiya Sriram

06/04/2025 11:07 AM