A simplified GST structure for footwear features at the top of footwear startup Yoho co-founder’s Ahmad Hushsham Budget 2023 wishlist
Mumbai: The Indian footwear market registered a compound annual growth rate (CAGR) of by 8.8% to reach Rs. 960 billion in the last five years. The market is further expected to grow at 15–17% CAGR in the next five years in terms of value. The growth will be driven by both volume and price increases.
Speaking about what footwear retail in the country needs to achieve these targets, Ahmad Hushsham, co-founder of footwear startup Yoho said, “The Indian government is committed to promoting economic growth and development, and this focus has continued since the pandemic. We hope to see a budget that outlines a plan for increasing economic growth along with more investment in infrastructure and incentives for corporate capital expenditure.”
According to Hushsham simplifying GST on footwear will be an important step in this direction.
“Currently, the GST rate on footwear with a sale price above Rs1,000 is 18% and the rate on footwear with a sale price below Rs1,000 is 12%, which is confusing,” he said.
Additionally, in the past, GST was set at a rate of 5%. However, it has significantly increased over the past few years and is now at 12% and 18%.
“This, amidst increased cost of raw materials, is hurting the industry. Reducing the GST rate and having a uniform rate on all footwear would lead to lower prices and potentially increase consumer demand,” said the entrepreneur who founded Yoho along with Prateek Singhal in 2021.
Yoho uses technology and AI-powered solutions to create orthopaedic footwear.
According to the co-founder, another way to support growth and development would be to encourage the local production of footwear raw materials, components, co-polymers, moulds, and machinery at competitive prices under the “Make in India” initiative.
“This could boost India’s export ambitions and create employment, leading to lower overall prices and improving consumer sentiment,” Hushsham said.