Applicability of Standards on footwear traders may be extended to 8-10 months from 1.7.2023. In first phase it may be implement on manufacturers & later stage on retailers for smooth transition.
Confederation of All India Traders
“Vyapur Bhawan”
925/1, Naiwala, karol Bagh,New Delhi-110005.
Phone: +91-11-45099884, Telefax:+91-11-45032665
Email: teamcait@gmail.com Website: www.cait.in
Ref. No.: 3403/1/51
23rd April, 2023
Shri Piyush Goyal
Hon’ble Minister for Commerce & Industry,
Government of India
New Delhi
Dear Shri Piyush Goyal Ji,
Sub: Support for the Indian Footwear Retail industry with sufficient compliance time-frame of 8-10 months post implementation of Footwear (Quality Control) Order, 2022 for manufacturers
Ref: DPIIT Gazette Notifications dated 03.06.2022,
1) S.O. 2599(E)– Footwear Made from Leather and Other Materials (Quality Control) Order, 2022
2) S. O. 2600(E)– Footwear Made from all-Rubber and all Polymeric Material and its Components (Quality Control) Order, 2022.
We would like to bring to your kind attention towards the Quality Control Orders (QCOs) issued by DPIIT for Footwear made from Leather and Rubber /Polymer (to be effective from 01.07.2023), and making mandatory to conform to the corresponding Indian Standards and bear a Standard Mark under a licence from Bureau of Indian Standards (BIS).
The implementation of these QCOs at this crucial juncture without sufficient transition time for the retail industry has created a precarious situation and will be an impediment for the operation, growth and the sustenance of the Footwear Retail sector due to the following factors:
The industry is gearing up for readiness of QCO compliance for new manufacturing, but as of now there has been no clarity for applicability of QCO on the inventory manufactured / procured prior to 30th June, 2023 (before QCO effective date), for which large capital has been deployed by pan-India retailers, while incurring huge amount of taxes, duties & levies.
The manufacturers have already commenced the process for getting BIS registration and licences to comply with QCO requirements, but the existing infrastructure and testing facilities are not sufficient to cater to the current requirements of stringent BIS testing and certification for all the manufacturers and products being manufactured. Moreover BIS has still not come up with product manuals for some standards, testing equipment required, testing methodologies and procedures. As on date majority of the manufacturing plants still do not have internal testing facilities within their premises, and will require further investments and time for setting up such facilities prior to applying for BIS registration & certification process, and just a few manufacturers / suppliers have been able to receive the BIS licences till date (30 Licences issued across 10 Leather footwear categories, and 18 licences for 13 categories of Non-Leather Footwear). At current pace the certification process for majority of manufacturers will not be completed even after the QCO’s effective date.
Further to this, even if all the manufacturers are granted BIS licences within the specified time frame of QCO implementation, the retailers / wholesalers would not be able to comply with the QCO requirement from the same effective date due to the fact that they would be holding huge inventory procured / manufactured prior to 30th June, 2023. Moreover the retailers would still require a lead time of around 4-6 months for placing purchase orders, designing process, manufacturing of customized /assorted orders, logistics and last mile transportation till pan-India retail stores to maintain sufficient inventory. The manufactures will also need a lead time to manufacturer and supply the goods after placement of purchase orders. Therefore, the retail industry cannot implement the QCO on the same date as applicable for the manufacturers.
Therefore, the effective date of QCO for the retail traders must account for the lead time in procurement of inventory and should be suitably extended while ensuring the sufficient lead time from the date of implementation of QCO by the manufacturers, i.e. 8-10 months from the effective date for the manufacturers.
As far as the existing inventory on the effective date is concerned, we would like to highlight that the retailers have to offer sufficient choices to the consumers with variety ranging from different styles, trends, types, colour, sizes etc. The retailers are at the last stage of the supply chain and procure from various manufacturers while resorting to multiple logistics cycles including transportation from the manufacturer to wholesalers to warehouses etc. to ensure a sufficient assortment or customized stock for retail purpose and sales are highly dependent on the consumer demand / prevailingfashion trends / style statements etc. which are quite dynamic and fluctuating throughout the year. Therefore the retailers need huge assortment and a large part of inventory gets blocked for 2-4 years. The average inventory holding time for footwear retailers is 1-2 years. In absence of clarity on QCO applicability on the existing inventory, the retail business will be severely hampered as the traders are not able to decide whether to procure any inventory before 30th June, 2023 and continue the operations as BIS certified inventory is not available due to only miniscule number of manufacturers certified by BIS till date. Further, there is huge uncertainty and apprehension around the sale and disposal of existing inventory which is blocking working capital worth thousands of crores for the pan India retailers.
As far as allowing sale of existing inventory is concerned, a similar precedence was set with the recent extension of the Hallmarking of Gold Jewellery and Gold Artefacts Order, 2020 where a transition time of three months was provided to the jewellers including the retailers with declared stock manufactured / procured prior to July, 2021 (implementation of new hallmarking (HUID), for re-hallmarking of jewellery. However, unlike hallmarking of jewellery, in case of footwear, the existing inventory cannot be returned to manufacturers for getting ISI marking done, therefore, the permission to hold and sell the declared inventory beyond the effective date is critical for the footwear retail sector. The different QCO timeline is critical for streamlined QCO compliance by both the manufacturers and the retail eco-system, and to ensure uninterrupted supply chain operations with sufficient quality production to cater to the growing demand in the country.
Submission and Support Sought
In view of the above, and in spirit of Ease of Doing Business, we earnestly request your kind intervention and support for the following:
1) Retail industry to be allowed 8-10 months’ time extension from the date of implementation of QCO by the manufacturers.
2) Exemption for the existing inventory manufactured / procured prior to the QCO effective date, on declaration to BIS.
We shall be grateful for your kind support in this regard.
Thank you. With kind regards
Truly yours
Praveen Khandelwal
National Secretary General
Contact Cell : +91-9891015165
