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Input cost hike cripples Bahadurgarh footwear hub, production cut to half

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India’s largest non-leather footwear hub in Jhajjar’s Bahadurgarh on the Delhi-Haryana border has been hit hard by the West Asia crisis with raw material prices soaring by 50 to 70 percent and production falling by nearly 50 percent. Supply and work orders worth around Rs 500 crore, domestic and international, are hanging fire.Speaking to The Tribune, Narendra Chhikkara, senior vice-president, Bahadurgarh Footwear Park Association, said the hub houses over 2,500 units directly and indirectly linked to the footwear industry and produces around one crore pairs of shoes daily, nearly 60% of India’s non-leather footwear output.Product line manufactured in the area includes casual and formal shoes, sandals, slippers and sports footwear.The production of all these footwear is down 50 by per cent due to rising raw material costs amid energy supply shortages. Raw material prices are up 50 to 70 percent and may go higher as the import of raw materials stall.A ground visit revealed shortage of polyester thread, a key raw material for footwear, amid supply chain disruptions. This has forced manufacturers to cut production. Besides, exports have come to a complete halt, triggering halts in supplies and work orders worth around Rs 500 crore so far.Footwear products from the area are mainly exported to the Gulf nations, including Saudi Arabia, Qatar, Bahrain and Oman, and African countries via the Dubai route.LPG shortages have further added to the industry’s woes. LPG is used for pasting and laminating materials onto footwear, but gas supply through pipelines stands reduced by up to 50 per cent, hitting business.Subhash Jagga, general secretary, Bahadurgarh Footwear Association, said over 60 percent raw materials for the industry are imported. “Many units could face closure if the war continues,” Jagga said.Another industrialist Shyam Lal said many units had reduced working hours following production drop. “I now run my unit for one shift. It makes no sense to operate machinery when the raw materials are unavailable,” he said.Industrialists further said the government should expedite GST refunds and temporarily relax provisions of Micro, Small and Medium Enterprises Development Act, which imposes penalties if buyers fail to make payment within 45 days of accepting goods or services.

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