July 29: The trade deficit for footwear, which was considered self-reliant, has increased during the pandemic. During the last fiscal year, the import of footwear into Nepal increased while the export took a nosedive.

According to the data of the Department of Customs, the export of footwear declined by 60 percent in the last FY. While 5.66 million units of shoes were exported from Nepal in the FY 2076/77, the export was limited to 2.27 million units in the FY 2077/78. Last year, shoes worth Rs 732 million were exported, which is Rs 870 million less than that of  FY 2076/77.

Similarly, the data shows that the import of footwear has increased. Last year, the import increased by 35 percent compared to the previous year. In FY 2075/76, 22 million units of shoes were imported while the import went up to 29.8 million units last year.

The recent figure is a U-turn from the data of few years ago. The import of footwear had been continuously declining and the export had been increasing since FY 2073/74. However, the import has increased and export has decreased since last year.

Footwear falls among the 13 items that the government has classified as self-reliant products. The government had stated to promote self-reliant business by implementing Industrial Policy 2067, Industrial Enterprises Act 2076 and Industrial Enterprises Regulation 2076. Entrepreneurs, on the other hand, say that the government has not given any special discount to the footwear industry.

Uttam Prasad Adhikari, senior vice-president of Footwear Manufacturers Association of Nepal, who is also the operator of Chitwan Footwear, said that the customs has not given any exemption on the import of raw materials yet. “There has been no special support from the government. So far, the businessmen have done everything on their own,” he said.

Since there is no facilitation from the government and most of the shoe factories are closed due to the Covid-19 pandemic, he said that the imports have increased to meet the demand as the production has declined.

“Majority of the workers in the shoe industry are Indians, but they have not been able to return to work due to the pandemic,” he said, “The production has decreased as it is not easy to import raw materials due to the pandemic.” He is of the view that the production of shoes will gain momentum once the situation returns to normal.

According to the detailed study report of Industrial Products that can be self-reliant in Nepal 2078, that was released by the Department of Industry last June, there are currently six large, 15 medium, 300 small and 1,200 micro footwear industries in Nepal. Moreover, the study revealed that the annual production capacity of such industries is 45 million units. Likewise, 70,000 people are directly employed in these industries.